Consumer Portfolio Services Inc Reports Mixed Q3 2023 Results
Consumer Portfolio Services Inc (NASDAQ:CPSS) reported a slight revenue increase to $92.1 million in Q3 2023 from $90.3 million in Q3 2022.
Net income for Q3 2023 stood at $10.4 million, a decrease from $25.4 million in the same quarter the previous year.
New contract purchases totaled $322.4 million, while the total portfolio balance grew to $2.943 billion.
Annualized net charge-offs and delinquencies rose, indicating potential credit quality concerns.
On November 13, 2023, Consumer Portfolio Services Inc (NASDAQ:CPSS) released its 8-K filing, announcing its financial results for the third quarter ended September 30, 2023. The company saw a modest increase in revenue, reaching $92.1 million, up 2.0% from the prior year's $90.3 million. However, net income experienced a significant drop to $10.4 million, or $0.41 per diluted share, compared to $25.4 million, or $0.95 per diluted share, in Q3 2022.
Financial Performance Overview
Consumer Portfolio Services Inc's pretax income for Q3 2023 was $14.2 million, a decrease from the $34.3 million reported in the same quarter of the previous year. The nine-month period ending September 30, 2023, also reflected a decline in pretax income, with $51.3 million compared to $97.9 million for the same period in 2022. Total operating expenses for the quarter increased to $77.9 million from $56.0 million year-over-year.
Portfolio and Credit Quality
The company's receivables totaled $2.943 billion as of September 30, 2023, marking an increase from both the previous quarter and the same period last year. However, the company faced challenges in credit quality, with annualized net charge-offs for Q3 2023 at 6.86% of the average portfolio, up from 4.93% in Q3 2022. Delinquencies greater than 30 days also increased to 13.31% of the total portfolio, compared to 10.85% as of September 30, 2022.
Management Commentary
Charles E. Bradley, Chief Executive Officer of Consumer Portfolio Services Inc, commented on the results:
Continued growth in both interest income and the loan portfolio were the bookends to our solid quarter,
and added,
Despite the economic headwinds, we remain cautiously optimistic as we continue to grow the loan portfolio and monitor the performance of existing loans while staying focused on cost efficiency.
Future Outlook and Conference Call
Consumer Portfolio Services Inc has scheduled a conference call to discuss the Q3 2023 results. Interested parties can pre-register for the call, which will also be available for replay on the companys investor relations website.
While the company has reported growth in certain areas, the increased operating expenses and higher credit losses highlight the challenges faced in the current economic environment. Investors and stakeholders will be looking closely at how Consumer Portfolio Services Inc navigates these challenges in the coming quarters.
Explore the complete 8-K earnings release (here) from Consumer Portfolio Services Inc for further details.
This article first appeared on GuruFocus.
