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PRA Group (PRAA) Q3 Earnings Miss Estimates, Tumble Y/Y

PRA Group's (PRAA) Q3 earnings suffer steep expenses and lower revenues.

This story originally appeared on Zacks

PRA Group, Inc.’s PRAA third-quarter 2021 earnings per share of 76 cents missed the Zacks Consensus Estimate of 81 cents by 6.2% due to lower revenues. However, the bottom line decreased 17.4% year over year.

The company witnessed steep operating expenses in the quarter under review.

Revenues of $263.7 million were down 1.5% from the year-ago quarter’s level due to lower portfolio income. However, the top line surpassed the Zacks Consensus Estimate by 2.6%.

The company’s cash collection of $488.4 million decreased 6% from the year-ago figure due to return to more normal seasonal trends in the United States along with lower volume on accounts in the U.S. legal channel during the current year.

- Zacks

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 $6.2 million increased 213.9% year over year.

The company’s portfolio income came in at $212.9 million during the quarter under review, down 11.4% year over year.

Total operating expenses were up 3.9% year over year to $186.1 million due to higher compensation and employee services, agency fees, outside fees and services, communication, rent and occupancy and other operating costs.

Business Update

The company spent $391.9 million on finance receivables in the quarter under review.

Share Repurchase Update

The company bought back shares worth $74 million in the third quarter of 2021. Management also added $80 million to its share buyback plan, raising the authorization to $230 million.

Financial Update (as of Sep 30, 2021)

The company had total assets worth $4.3 billion, down 2.7% from the level at 2020 end.

PRA Group exited the third quarter with total equity of $1.4 billion, up 3.6% from the level on Dec 31, 2020.

Cash and cash equivalents in the quarter under discussion were $56.5 million, down 47.9% from the level at 2020 end.

At the end of the third quarter, borrowings decreased 5.3% to $2.5 billion from the number at 2020 end.

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.

Of the finance sector players that have reported third-quarter earnings so far, the bottom-line results of American Express Company AXP, Synchrony Financial  SYF and  Discover Financial Services DFS beat the respective Zacks Consensus Estimate.


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