Rent-A-Center Third Quarter Earnings Sneak Peek

Rent-A-Center Inc (NASDAQ:RCII) will unveil its latest earnings on Monday, October 22, 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 estimate of analysts is for net income of 68 cents per share, a rise of 13.3% 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 69 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 68 cents during the last month. For the year, analysts are projecting profit of $3.15 per share, a rise of 8.2% from last year.

Past Earnings Performance: Last quarter, the company beat estimates by 3 cents, coming in at net income of 74 cents a share versus the estimate of profit of 71 cents a share. It marked the fourth straight quarter of beating estimates.

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A Look Back: In the second quarter, profit rose 10.8% to $44.2 million (74 cents a share) from $39.9 million (63 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 7.4% to $749.7 million from $698.3 million.

Wall St. Revenue Expectations: On average, analysts predict $759.8 million in revenue this quarter, a rise of 7.9% from the year-ago quarter. Analysts are forecasting total revenue of $3.14 billion for the year, a rise of 9% from last year’s revenue of $2.88 billion.

Stock Price Performance: Between September 18, 2012 and October 16, 2012, the stock price dropped $2.28 (-6.2%), from $37.03 to $34.75. The stock price saw one of its best stretches over the last year between December 16, 2011 and December 27, 2011, when shares rose for seven straight days, increasing 8.7% (+$3.06) over that span. It saw one of its worst periods between October 5, 2012 and October 12, 2012 when shares fell for six straight days, dropping 3.3% (-$1.18) 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 54.8% in the fourth quarter of the last fiscal year and 17.4% in the first quarter before increasing again in the second quarter.

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 6% in the third quarter of the last fiscal year, 8.9% in the fourth quarter of the last fiscal year and 12.5% in the first quarter before increasing again in the second quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.66 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.

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)

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