Rent-A-Center Inc Fourth Quarter Earnings Sneak Peek

Rent-A-Center Inc (NASDAQ:RCII) will unveil its latest earnings tomorrow, Tuesday, January 29, 2013. 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 estimate of analysts is for net income of 83 cents per share, a decline of 2.4% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 84 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 83 cents during the last month. For the year, analysts are projecting profit of $3.11 per share, a rise of 6.9% from last year.

Past Earnings Performance: Last quarter, the company saw net income of 67 cents per share versus a mean estimate of profit of 67 cents per share. This comes after two consecutive quarters of exceeding expectations.

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A Look Back: In the third quarter, profit rose 27.8% to $39.9 million (67 cents a share) from $31.2 million (52 cents a share) the year earlier, meeting analyst expectations. Revenue rose 5% to $739.3 million from $704.3 million.

Here’s how Rent-A-Center Inc traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

rcii

Wall St. Revenue Expectations: On average, analysts predict $777.5 million in revenue this quarter, a rise of 5.4% from the year-ago quarter. Analysts are forecasting total revenue of $3.1 billion for the year, a rise of 7.6% from last year’s revenue of $2.88 billion.

Stock Price Performance: Between October 25, 2012 and January 23, 2013, the stock price rose $1.45 (4.4%), from $33.21 to $34.66. The stock price saw one of its best stretches over the last year between September 7, 2012 and September 14, 2012, when shares rose for six straight days, increasing 4% (+$1.43) over that span. It saw one of its worst periods between December 18, 2012 and December 28, 2012 when shares fell for eight straight days, dropping 7.4% (-$2.69) over that span.

Key Stats:

This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Net income rose 17.4% in the first quarter and 10.8% in the second quarter before increasing again in the third quarter.

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 8.9% in the fourth quarter of the last fiscal year, 12.5% in the first quarter and 7.4% in the second quarter before increasing again in the third quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.54 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 second quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 8.4% to $745.8 million while assets rose 0.7% to $1.15 billion.

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.

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