Dollar Financial Earnings: Here’s Why the Stock is Falling Now
Dollar Financial Corp. (NASDAQ:DLLR) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 0.13%.
Dollar Financial Corp. Earnings Cheat Sheet
Results: Adjusted Earnings Per Share decreased 15.52% to $0.49 in the quarter versus EPS of $0.58 in the year-earlier quarter.
Revenue: Rose 0.9% to $269.1 million from the year-earlier quarter.
Actual vs. Wall St. Expectations: Dollar Financial Corp. reported adjusted EPS income of $0.49 per share. By that measure, the company beat the mean analyst estimate of $0.47. It missed the average revenue estimate of $285.18 million.
Quoting Management: “Fiscal 2013 presented our Company with a number of unique challenges, particularly in the United Kingdom,” said Jeff Weiss, the Company’s Chairman and Chief Executive Officer. “The Company’s retail and internet businesses have recently transitioned to more restrictive regulatory requirements in the United Kingdom. The new requirements provide guidance principally with respect to loan disclosures, loan affordability assessments, loan extension limitations, and collection practices. The industry association shift to a three loan roll-over limitation, which we believe is more restrictive than the current policies of many of our competitors, is causing many of the outstanding short-term consumer loans in the United Kingdom to become due. Consequently, we have experienced higher loan defaults in our U.K. business during the second half of the fiscal year. Accordingly, the Company tightened its underwriting criteria which resulted in decreased loan originations in fiscal 2013 in the United Kingdom and, while the transition to the new regulatory guidelines proceeds, we expect to maintain lower loan originations at least through the first half of fiscal 2014 in order to reduce the risk of higher loan defaults during this period.”
Key Stats (on next page)…
Revenue decreased 5.11% from $283.6 million in the previous quarter. EPS increased 104.17% from $0.24 in the previous quarter.
Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.5 and has not changed. For the current year, the average estimate is a profit of $1.74, which is the same with that ninety days ago.
Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.
(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)