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PRA Group's (PRAA) Q4 Earnings Beat Estimates, Increase Y/Y

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PRA Group, Inc.’s PRAA fourth-quarter 2020 earnings per share of 65 cents beat the Zacks Consensus Estimate of 62 cents by 4.8%. Moreover, the bottom line increased 8.3% year over year, primarily owing to an improved top line.

Also, revenues of $274 million were up 1.9% from the year-ago quarter, courtesy of the company’s portfolio income. Further, the top line surpassed the Zacks Consensus Estimate by 9.2%.

The company’s cash collection of $481.9 million climbed 6% from the year-ago figure on the back of nonlegal collections in the United States and by Core and Insolvency in Europe.

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 $2.9 million dropped 32% year over year.
The company’s portfolio income came in at $233.5 million in the quarter under review compared with income recognized from finance receivables of $262.8 million in the prior-year quarter.

Total operating expenses dipped 0.6% over year to $184.6 million, mainly owing to lower legal collection fees.

Moreover, the same was offset by a surge in outside fees and services.

Business Update

The company spent $289.8 million on finance receivables in the quarter under review.

Financial Update (as of Dec 31, 2020)

The company had total assets worth $4.5 billion, up 0.7% from the level at 2019 end.

PRA Group exited the quarter with total equity of $1.3 billion, up 11.9% from the level on Dec 31, 2019.

Cash and cash equivalents in the quarter under discussion were $108.6 million, down 9.3% from the level at 2019 end.

At the end of the fourth quarter, borrowings decreased 5.2% to $2.6 billion from the number at 2019 end.

Full-Year Update

Net income of the company came in at $3.26 per share, up 73% year over year. This compares favorably with the Zacks Consensus Estimate of $3.22 per share.

Total cash collections increased 9% to $2 billion.

Total revenues of the company totalled $1.1 billion, up 5% year over year.
This compares favourably with the consensus mark of $1.04 billion.

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.

Among other stocks in the same space that already reported fourth-quarter earnings, the bottom-line results of Mastercard Incorporated MA, American Express Co. AXP, and Discover Financial Services DFS surpassed their respective estimates.

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