Payday Loans Fuel Cash America Gains
Revenue growth for payday loans, including those extended over the Internet, helped Fort Worth-based Cash America International rack up a 19 percent increase in net income for the second quarter.
Earnings were $13.2 million, or 43 cents a share, compared with $10.9 million, or 36 cents a share a year earlier, beating analysts’ estimates by 3 cents as calculated by Zacks Investment Research. Revenue hit $213.9 million, compared with $149.9 million a year earlier.
“All aspects of our business experienced increases in revenue, led by our expanded balances of cash advance loans, which posted the largest portion of the year-over-year gains in revenue,” President Dan Feehan said.
But he stressed that Cash America’s pawnshop loans and merchandise sales represented about two-thirds of revenue. Pawn revenue was up 18 percent, he said.
The company predicted that third-quarter profit would range from 52 to 58 cents a share.
Loan fees from cash advance payday loan units, not including pawnshops, increased to $76.9 million from $29.1 million a year earlier.
