Rent-A-Center Inc (NASDAQ:RCII) will unveil its latest earnings on Monday, July 23, 2012. Rent-A-Center is an operator in the United States rent-to-own industry.
Rent-A-Center Inc Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average analyst estimate is for profit of 71 cents per share, a rise of 4.4% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 75 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 71 cents during the last month. Analysts are projecting profit to rise by 7.6% compared to last year’s $3.13.
Past Earnings Performance: Last quarter, the company reported net income of 87 cents per share versus a mean estimate of profit of. The company has beaten estimates for the past three quarters.
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A Look Back: In the first quarter, profit rose 17.4% to $51.9 million (87 cents a share) from $44.2 million (69 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 12.5% to $835.3 million from $742.2 million.
Stock Price Performance: Between April 20, 2012 and July 17, 2012, the stock price fell $3.50 (-9.5%), from $36.76 to $33.26. The stock price saw one of its best stretches over the last year between August 19, 2011 and August 31, 2011, when shares rose for nine straight days, increasing 21.6% (+$5.01) over that span. It saw one of its worst periods between July 5, 2012 and July 12, 2012 when shares fell for six straight days, dropping 6.1% (-$2.13) over that span.
Wall St. Revenue Expectations: Analysts are projecting a rise of 8.2% in revenue from the year-earlier quarter to $755.5 million.
On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 4% in the second quarter of the last fiscal year, 6% in the third quarter of the last fiscal year and 8.9% in the fourth quarter of the last fiscal year before increasing again in the first quarter.
There has enjoyed solid performance recently heading into this earnings announcement with profit rising by a year-over-year average of 8.2% for the last four quarters.
Analyst Ratings: With seven analysts rating the stock a buy, none rating it a sell and three rating the stock a hold, there are indications of a bullish stance by analysts.
Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.56 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.66 in the fourth quarter of the last fiscal year to the last quarter driven in part by an increase in liabilities. Current liabilities increased 7% to $750.4 million while assets rose 0.5% to $1.17 billion.
Competitors to Watch: Aaron’s, Inc., McGrath RentCorp, Best Buy, GameStop, RadioShack Corporation, CONN’S, Inc., hhgregg, Inc., and Electro Rent Corporation.
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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)
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