Aaron’s Inc. Earnings: Profitable as Revenue Ticks Higher

Aaron’s Inc. (NYSE:AAN) reported its results for the fourth quarter. Aaron’s is engaged in the sales and lease ownership, specialty retailing and rental of residential and office furniture, consumer electronics and home appliances and accessories.

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Aaron’s Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for Aaron’s Inc. fell to $30.5 million (40 cents per share) vs. $30.8 million (38 cents per share) a year earlier. This is a decline of 0.8% from the year earlier quarter.

Revenue: Rose 8.1% to $523.5 million from the year earlier quarter.

Actual vs. Wall St. Expectations: Aaron’s Inc. reported adjusted net income of 43 cents per share. By that measure, the company fell in line with the mean estimate of 43 cents per share. Analysts were expecting revenue of $519.3 million.

Quoting Management: “Excluding the aforementioned $.03 diluted per share charge, our results for the fourth quarter and year were within our guidance,” said Ronald W. Allen, interim President and Chief Executive Officer of Aaron’s.  “We had good revenue and customer growth during the quarter, and believe the results were outstanding in these challenging economic times.  Our market remains large, and the high-quality, affordable basic home furnishings we provide fulfills the desires and needs of our customers.”

Key Stats:
Revenue has risen the past four quarters. Revenue increased 7.3% to $485.2 million in the third quarter. The figure rose 8.5% in the second quarter from the year earlier and climbed 7.6% in the first quarter from the year-ago quarter.

Aaron’s fell in line with estimates last quarter after missing forecasts in the previous quarter with net income of 36 cents versus a mean estimate of net income of 38 cents per share.

Net income has dropped 1.3% year over year on average across the last five quarters. Performance was hurt by a 55.8% decline in the second quarter from the year earlier quarter.

Aaron’s cost of sales rose 8.2% from a year earlier. Last quarter, cost of sales was 21.3% of revenue, similar to a year earlier.

Looking Forward: Expectations for the first quarter of the next fiscal year have not changed from 61 cents. For the fiscal year, the average estimate has been unchanged at $1.75 a share.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com