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PRA Group’s (PRAA) Q2 Earnings & Revenues Miss Estimates


PRA Group Inc.’s PRAA second-quarter 2017 earnings per share of 25 cents missed the Zacks Consensus Estimate by 48%. The bottom line also deteriorated 70% from the year-ago quarter due to lower revenues.

Net income of $11.7 million declined 68% from the prior-year quarter.

Operational Update

PRA Group’s total revenue was $200 million, down 12.2% year over year. Revenues also missed the Zacks Consensus Estimate by 4.8%.

Additionally, PRA Group’s revenues from finance receivables income fell 6.4% to $190.8 million. The downside stemmed from the reduction in finance receivable balances from the elevated allowance charges recorded in 2016 and normal attrition.

Fee income of $6.3 million plunged 71.6% primarily due to the sale of Government Services in the first quarter and a decrease in fee income generated by the Claims Compensation Bureau business which experienced an outsized second quarter in 2016.

Total operating expenses decreased 2.6% year over year to $152 million. The decline was largely due to a fall in legal collection expenses and agency fees.

PRA Group, Inc. Price, Consensus and EPS Surprise

Financial Update

As of Jun 30, 2017, PRA Group had total assets worth $3.4 billion, up 6.2% from year-end 2016.

The company exited the quarter with total equity of $1 billion, up 9.5% from Dec 31, 2016.

As of Jun 30, 2017, cash and cash equivalents were $92.7 million, down 1.6% from year-end 2016.

In the reported quarter, borrowings increased 6.4% to $1.9 billion.

Zacks Rank and Performance of Other Insurers

PRA Group currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other players from the same space that have reported their second-quarter earnings so far, the bottom lines of The Progressive Corporation (PGR) and The Travelers Companies, Inc. (TRV) missed their respective Zacks Consensus Estimate, while RLI Corp. (RLI) beat the same.

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