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PRA Group's (PRAA) Q3 Earnings Beat Estimates, Improve Y/Y

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Zacks Equity Research
·3 min read
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PRA Group, Inc.’s PRAA third-quarter 2020 earnings per share of 92 cents beat the Zacks Consensus Estimate of 64 cents by 43.8%. Moreover, the bottom line skyrocketed 67.3% year over year, primarily owing to an improved top line.

However, the same was offset to some extent by the COVID-19 led pandemic.

Meanwhile, revenues of $268 million were up 7.2% from the year-ago quarter, courtesy of portfolio income. Further, the top line surpassed the Zacks Consensus Estimate by 5.5%.

The company’s cash collection of $519.3 million climbed 15% from the year-ago figure on the back of higher contributions from Americas Core and Europe Core. Cash collections in the quarter were solid in the United States.

PRA Group, Inc. Price, Consensus and EPS Surprise

PRA Group, Inc. Price, Consensus and EPS Surprise
PRA Group, Inc. Price, Consensus and EPS Surprise

PRA Group, Inc. price-consensus-eps-surprise-chart | PRA Group, Inc. Quote

Quarterly Operational Update

PRA Group’s fee income of $2 million dropped 17.3% year over year.
The company’s portfolio income came in at $240.3 million in the quarter under review compared with income recognized from finance receivables of $247.5 million in the prior-year quarter.

Total operating expenses dipped 1.1% over year to $179.2 million, mainly owing to lower legal collection fees. Moreover, a decline in compensation and employee benefits as a result of trimmed U.S. call center staff also contributed to this upside.

Business Update

The company spent $177.6 million on finance receivables in the quarter under review.

Financial Update (As of Sep 30, 2020)

The company had total assets worth $4.2 billion, down 5.1% from the level at 2019 end.

PRA Group exited the quarter with total equity of $1.2 billion, up 3.7% from the level on Dec 31, 2019.

Cash and cash equivalents in the quarter under discussion were $92.8 million, down 22.5% from the level at 2019 end.

At the end of the third quarter, borrowings decreased 10.1% to $2.5 billion from the number at 2019 end.

Zacks Rank and Performance of Other Players

PRA Group currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Of the other companies in the finance sector that already reported third-quarter earnings, the bottom-line result of Visa Inc. V beats the Zacks Consensus Estimate while that of Synchrony Financial SYF and American Express Company AXP missed the same.

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PRA Group, Inc. (PRAA) : Free Stock Analysis Report
 
American Express Company (AXP) : Free Stock Analysis Report
 
Visa Inc. (V) : Free Stock Analysis Report
 
Synchrony Financial (SYF) : Free Stock Analysis Report
 
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