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PRA Group’s (PRAA) Q3 Earnings Beat Estimates, Down Y/Y


PRA Group Inc.’s PRAA third-quarter 2017 earnings per share of 34 cents surpassed the Zacks Consensus Estimate by 17%. The bottom line, however, declined 50% from the year-ago quarter due to lower revenues.

Net income of $15.6 million declined 54.5% from the prior-year quarter.

Operational Update

PRA Group’s total revenues were $201 million, down 9% year over year. Revenues, however, surpassed the Zacks Consensus Estimate by 3%.

Additionally, PRA Group’s revenues from finance receivables income fell 3% to $197.2 million. The downside stemmed from significant attrition of higher yielding Insolvency portfolios.

Fee income of $2.7 million plunged 85% primarily due to the sale of two fee- based subsidiaries earlier in the year.

Total operating expenses decreased 4.5% year over year to $146.7 million. The decline was largely due to a fall in legal collection expenses and agency fees.

In the quarter, the company reported cash collections of $381.8 million, up 3% from the prior-year quarter.

PRA Group, Inc. Price, Consensus and EPS Surprise

Financial Update

As of Sep 30, 2017, PRA Group had total assets worth $3.5 billion, up 9.3% from year-end 2016.

The company exited the quarter with total equity of $1.1 billion, up 16% from Dec 31, 2016.

As of Sep 30, 2017, cash and cash equivalents were $113.7 million, up 20% from year-end 2016.

In the reported quarter, borrowings increased 10% to $2 billion.

The company invested $210.9 million in new finance receivables in the third quarter, up 31% year over year.

Zacks Rank and Performance of Other Insurers

PRA Group currently has a Zacks Rank #5 (Strong Sell).

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

Among other insurers that have reported their third-quarter earnings so far, Brown & Brown, Inc. BRO, RLI Corp. RLI and The Progressive Corporation PGR beat their respective Zacks Consensus Estimate.

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