Rent-A-Center Earnings: Misses Wall Street Estimates

Rent-A-Center Inc. (NASDAQ:RCII) delivered a profit and missed Wall Street’s expectations, AND 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 after-hours.

Markets are at 5-year highs! Discover the best stocks to own. Click here for our fresh Feature Stock Pick now!

Rent-A-Center Inc. Earnings Cheat Sheet

Results: Net income decreased -3.65% to $47.5 million (81 cents per diluted share) in the quarter versus a net gain of $49.3 million in the year-earlier quarter.

Revenue: Rose 2.84% to $758.4 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Rent-A-Center Inc. reported adjusted net income of 81 cents per share. By that measure, the company missed the mean analyst estimate of $0.83. It missed the average revenue estimate of $777.51 million.

Quoting Management: “We are generally pleased with our overall 2012 results as we achieved total revenue growth of 7% and over a 6% increase in net earnings per diluted share to $3.09, both within our annual guidance issued last January,” said Mark E. Speese, the Company’s Chairman and Chief Executive Officer. “The core rent-to-own business generated total revenue growth of 1% in 2012,” Speese continued…

…In addition, the RAC Acceptance business continued to generate impressive results, with revenue growth of over 77% in 2012 to $343 million, an operating profit for the year of over $28 million and 966 kiosks open at December 31, 2012,” Speese commented. “In 2013, we intend to continue focusing on keeping the core business strong and further investing in our strategic initiatives, while continuing to return value to our shareholders through dividends and opportunistic common stock repurchases,” Speese concluded.

Key Stats:

Revenue increased 2.58% from $739.31 million in the previous quarter. Net income increased 19.02% from $39.91 million 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 $0.95 and has not changed. For the current year, the average estimate is a profit of $3.11, 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.)