PRA Group (PRAA) Posts In-Line Earnings & Revenues In Q2

PRA Group Inc.’s (NASDAQ:PRAA) second-quarter 2016 earnings per share of 83 cents came in line with the Zacks Consensus Estimate but declined 23% from the year-ago quarter.

PRA Group’s total revenue was $228 million, down 3.8% year over year. Revenues, however, also met the Zacks Consensus Estimate.

Decline in the second-quarter revenues mainly stemmed from two non-accrual portfolios in Italy, which added cash collections of $6.7 million to principal amortization.

Quarterly Update

Cash collections dipped 0.6% year over year to $387.2 million, mainly due to lower collections at Americas-Insolvency and America-Core. While collections at Americas-Insolvency were down 1.3% to $67.7 million, those at America-Core dropped 2.6% to $213 million. On the other hand, collections at Europe-Core increased 9.5% to $102.9 million, which those at Europe-Insolvency surged 35.5% to $2.7 million, both on a year-over-year basis.

Additionally, PRA Group’s revenues from finance receivables income were $204 million, down 7.3%. Other revenues plunged 35.45% to $2.1 million. Fee income soared 61% to $22.3 million.

Operating expenses rose 4.7% year over year to $155 million. This was mainly due to higher legal collection fees, agency fees, outside fees and services, communication, rent and occupancy expenses, depreciation & amortization and other operating expenses.

Financial Update

As of Jun 30, 2016, PRA Group had total assets worth $3.3 billion, up 9% from year-end 2015. The company exited the quarter with total equity of $0.9 billion, up 8.2% from Dec 31, 2015.

Cash and cash equivalents as of Jun 30, 2016 were $93.5 million, up 11.4% from year-end 2015. For the reported quarter, borrowings increased 11.3% to $1.9 billion.

PRA GROUP INC Price, Consensus and EPS Surprise

PRA GROUP INC Price, Consensus and EPS Surprise | PRA GROUP INC Quote

Zacks Rank and Performance of Other Stocks from Finance-Miscellaneous Services Industry:

PRA Group currently holds a Zacks Rank #2 (Buy).

The bottom line at American Express Co. (NYSE:AXP) , Euronet Worldwide Inc. (NASDAQ:EEFT) and CIT Group Inc. (NYSE:CIT) beat their respective Zacks Consensus Estimate for the quarter ending on Jun 30, 2016.