Congrats!! biz.yahoo.com
Tuesday January 30, 6:35 pm Eastern Time
CompuCredit misses fourth-quarter estimate
(UPDATE: adds analyst comment, details)
ATLANTA, Jan 30 (Reuters) - CompuCredit Corp. (NasdaqNM:CCRT - news), citing increased competition and decreased consumer spending, reported fourth-quarter earnings that markedly missed Wall Street estimates and slashed its earnings outlook for 2001.
The Atlanta-based company, which markets bank-card and fee-based services to nonprime, underserved consumers, said its fourth-quarter net income came to $11.3 million, or 24 cents a share, down 65 percent from $32.3 million, or 77 cents a share, a year earlier.
The year-earlier results included one-time income of $18.1 million from retained interests in the company's purchased portfolios.
Analysts on average were expecting CompuCredit to post fourth-quarter 2000 earnings of 53 cents a share, according to First Call/Thomson Financial.
``It looks really, really bad,'' said Jordan Hymowitz of Robertson Stephens.
Hymowitz said CompuCredit's chargeoff rates for bad loans looked significantly high, and added he felt the company might have to make more provisions for losses in the future.
CompuCredit said its net charge-off rate was 13.2 percent in the fourth quarter, up from 11 percent in the third quarter. It said return on average managed loans was 3.2 percent for the fourth quarter, compared with 7.1 percent for the third quarter.
Credit-card issuers such as CompuCredit, which looks to identify consumers who are credit-worthy even if they have been turned down by other card issuers, have been under pressure as consumer spending has slowed and some economic indicators point to tougher times ahead.
CompuCredit said it spent a record $20.7 million on marketing during the fourth quarter, up from $9.6 million a year earlier. It said the increased spending helped generate growth of nearly 400,000 accounts.
But Hymowitz suggested growth initiatives do not necessarily reach the bottom line. ``Growth doesn't equal profitability in financial services,'' Hymowitz said.
CompuCredit also lowered its earnings estimates for 2001, saying it expects profit in the range of $1.22 to $1.26 a share. The First Call/Thomson Financial 2001 analyst consensus profit estimate was $3.04.
Separately, CompuCredit named Ashley Johnson chief financial officer, succeeding Brett Samsky, who becomes senior adviser to the chairman. It also appointed K.K. Srinivasan, a consumer credit specialist, to the post of chief credit officer.
CompuCredit scheduled a Wednesday conference call to give more details on its fourth-quarter results.
Shares of CompuCredit closed down 3/8 at $16-3/8, slightly up from their 52-week low of 14-1/2. They had been as high as 66-1/16 in the past year. |
