DFC Global Beats Earnings Est., Lags YoY - Analyst Blog
May 06 2013 - 7:20AM
Zacks
DFC Global Corp.
(DLLR) reported operating earnings of 24 cents per share for the
fiscal third quarter 2013 (ending Mar 31, 2013), which surpassed
the Zacks Consensus Estimate of 22 cents per share. However,
results lagged the year-ago earnings of 54 cents per share by
55.6%.
Including for one-time charges, DFC Global incurred a net loss of
$36.4 million or 86 cents in the fiscal third quarter 2013. The
company reported a net income of $31.8 million or 70 cents per
share in the year-ago period.
Quarterly Operational Update
Total revenue for the quarter climbed 5.8% year over year on a
constant currency basis to $283.6 million. Higher consumer lending
revenues (up 12.5% year over year on a constant currency basis)
along with slight improvement in pawn service fees and sales (up
1.2% year over year on a constant currency basis) aided the upside.
However, results were behind the Zacks Consensus Estimate by
2.4%.
Operating expenses escalated 21% year over year to $210.7 million.
Increase in expenses were due to higher salaries and benefits,
provision for loan losses, occupancy costs, advertising expenses,
depreciation, bank charges and armored carrier services,
maintenance and repairs, and other costs.
The extent of increase in operating expenses offset the increase in
revenue, thereby pulling down operating income by 23.9% year over
year to $72.9 million in the reported quarter.
Adjusted earnings before interest, tax, depreciation and
amortization (EBITDA) were $55.1 million, down 27.7% year over
year.
Share Repurchase Update
During the quarter, DFC Global bought back 0.23 million shares for
approximately $4 million, at an average share price of $17.26. As
of Apr 1, 2013, DFC Global is left with 2.2 million shares under
its share repurchase authorization.
Financial Position
DFC Global exited the quarter with cash and cash equivalents of
$207.3 million, down 7.5% from $224 million at year-end fiscal
2012.
Total assets of DFC Global declined 1.7% from $1.8 billion at Jun
30, 2012 to $1.7 billion at Mar 31, 2013.
Long-term debt of the company increased 4% from fiscal 2012 end
level to $976.5 million as of Mar 31, 2013. Debt-to-capital ratio
of DFC Global as of Mar 31, 2013 was 70%, up 120 basis points from
68.8% at Jun 30, 2012.
At Mar 31, 2013, DFC Global had
drawn $22.6 million from its $235 million global revolving credit
facility. The company had also drawn £5.3 million of its £6.0
million credit facilities in the U.K., and SEK 30.0 million and EUR
12.7 million of its respective SEK 125.0 million and EUR 18.8
million credit facilities in Scandinavia.
2013 Guidance
DFC Global reconfirmed its earnings
guidance for fiscal 2013. Excluding any one-time charges or gains
that may occur, the non-cash impact of ASC-470-20, and the non-cash
amortization associated with the legacy cross-currency interest
rate swap agreements, operating earnings are expected to be in the
range of $1.70–$1.80 per share.
Performance of Other
Financial Services Companies
American Express
Co. (AXP), also known as AmEx, reported its first-quarter
2013 operating earnings per share of $1.15. The result comfortably
surpassed the Zacks Consensus Estimate of $1.11 and the year-ago
quarter earnings of $1.07 a share.
Discover Financial
Services (DFS) reported first-quarter 2013 earnings per
share (EPS) of $1.33, surpassing the Zacks Consensus Estimate of
$1.12. EPS also surpassed the year-ago quarter’s earnings of
$1.21.
Euronet Worldwide
Inc. (EEFT), reported its first-quarter 2013 operating
earnings per share of 38 cents. The result surpassed both the Zacks
Consensus Estimate and the year-ago quarter earnings by 22.6%.
Zacks Rank
DFC Global currently carries Zacks
Rank #5 (Strong Sell).
AMER EXPRESS CO (AXP): Free Stock Analysis Report
DISCOVER FIN SV (DFS): Free Stock Analysis Report
DFC GLOBAL CORP (DLLR): Free Stock Analysis Report
EURONET WORLDWD (EEFT): Free Stock Analysis Report
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