EZCORP Q4 Results Below Estimates, Guides Negative to Flat Earnings Growth For 2013 (EZPW)

After the market closed Tuesday, instant cash solutions provider EZCORP (NASDAQ: EZPW) reported an increase in fiscal 2012 fourth-quarter revenues and earnings, compared to the corresponding period of fiscal 2011. However, the company missed revenue and earnings estimates of analysts. EZCORP also issued fiscal 2013 first-quarter and full-year earnings guidance that were below analysts’ expectations. EZCORP also announced a collaboration agreement with global payment service company Western Union Money Transfer. In after-hours trading on Tuesday, the share price of EZCORP was down by over 7%.

The Texas-based EZCORP provides consumer financial services. The company also offers signature loans, lines of credit and auto title loans. Additionally, the company provides debit cards and offers assistance to customers in obtaining loans from unaffiliated lenders.

Total revenues for the fiscal 2012 fourth quarter increased to $258.35 million from $234.09 million in the similar period last year. The revenue estimate of analysts was $260.8 million for the fourth quarter of fiscal 2012.

Net income for the fourth quarter increased to $38.57 million, or $0.75 per share, from $36.37 million, or $0.72 per share, in the comparable period of fiscal 2011. The earnings consensus of analysts was $0.75 for the reported quarter.

The operation expense for the fourth quarter increased to $76 million from $69.75 million in the year-ago similar period. Likewise, administrative expense for the fourth quarter increased to $30.27 million from $19.02 million in the fourth quarter of the previous fiscal year.

For the fiscal year 2012, total revenues increased to $992.46 million from $869.32 million in 2011.

Net income for the fiscal year 2012 increased to $143.71 million, or $2.81 per share, from $122.16 million, or $2.43 per share, in the similar period last year.

EZCORP anticipates earnings per share to be between $0.55 and $0.60 for the fiscal 2013 first quarter. The consensus estimate of analysts is $0.82 per share for the quarter. The company attributed the lower guidance for the first quarter to its expectation of continued weaknesses in the gold marketplace and regulatory pressures in Texas.

For the full year 2013, the company expects earnings per share in the range of $2.55 to $2.80. The guidance range is approximately 9% down to roughly flat from fiscal 2012. The earnings estimate of analysts is $3.22 for fiscal 2013. EZCORP expects to return to quarter-over-quarter earnings growth in the second half of fiscal 2013.

The company also entered into an agreement with Western Union Money Transfer. Under the terms of the agreement, money order, consumer bill payment services and the Western Union Money Transfer facility will be available at over 900 EZCORP-operated store locations in the United States. Added to this, Western Union money transfer services will also be available at more than 300 EZCORP-operated store locations in Mexico and Canada.

Commenting on the agreement, EZCORP President and CEO Paul Rothamel said, “Our agreement with Western Union will allow EZCORP to provide vital money transfer and other payment services, thereby deepening our relationship with our customer base.”

EZCORP ended Wednesday’s trading session at $17.81, down 14% on heavy volume of more than 1.5 million shares.

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Published by Duncan Oleinic

Duncan Oleinic is from New Yourk. After graduating with a degree in physics, he began his career as an analyst in a broking firm. Through this experience he was able to advance to the role of correspondent for a U.S based financial news provider, where he worked from 2001 to 2007. He subsequently joined a merchant banking firm as a financial analyst focused on valuing unlisted companies in the sub-continent. Over the course of his two years here, he performed valuations of several media companies which were later acquired by peers.

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