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Rent-A-Center cuts full-year outlook, shares fall

The Associated Press

NEWS: Shares of Rent-A-Center Inc. fell in after-hours trading Monday after the company posted third-quarter earnings that missed Wall Street expectations and it cut its full-year outlook.

DETAILS: Mark Speese, Rent-A-Center's chairman and CEO, said in a statement that promotions to attract customers hurt results. He also said that customers remained "under pressure."

Rent-A-Center, which is based in Plano, Texas, leases furniture and appliances to customers with an option to buy. The company owns and operates about 3,140 stores in the U.S., Canada, Mexico and Puerto Rico.

NUMBERS: Net income fell to $27.6 million, or 51 cents per share, in the three months ending Sept. 30. That compares to $40 million, or 67 cents per share, in the same period a year ago.

Analysts expected earnings of 62 cents per share, according to FactSet.

Revenue rose 2 percent to $754.8 million from $739.3 million.

Analysts expected revenue of $772.3 million.

During the third quarter, sales at stores open at least a year fell 0.8 percent from a year ago.

Sales in stores open at least a year is considered a key measure of a retailer's financial health because it strips away the impact of recently opened or closed stores.

FUTURE: For the full year, the company now expects earnings between $2.80 per share and $2.85 per share. That's down from its previous projections of earnings between $3.03 per share and $3.15 per share

Analysts expect earnings of $3.09 per share for 2013.

Rent-A-Center expects revenue to rise 1 percent from $3.1 billion last year. It previously said it expected revenue to rise 3 percent in 2013.

Rent-A-Center expects sales at stores open a year to fall 1.5 percent. It previously expected it to be flat or rise 1 percent.

STOCK: Down $2.01, or 5.6 percent, to $34 in after-hours trading Monday. Its shares rose 12 cents to $36.01 during normal trading hours Monday before the release of the earnings report.