A surge in reported revenue at Aames Financial Corp. has prompted speculation that sale is imminent.

Last week the subprime lender reported quarterly revenue up 178% from a year earlier. The rise, for the quarter ended June 30, was based largely on a change in accounting assumptions, analysts said, and that change may represent an attempt to show a good growth rate so the company can sell itself soon.

Aames reported $91.2 million of revenue for the three months. Net income was $9.8 million, versus a net loss of $14.1 million a year earlier.

Much of the revenue growth can be attributed to a 70% increase in gain- on-sale assumptions, said Jennifer Scutti, analyst with Prudential Securities, New York.

Several companies, including Aames, have been burned by this accounting method in the past year as securitized loans failed to perform as expected and the lenders took hits to earnings.

Last August, Aames took a $28 million charge to revalue the loans in its securitized pools and said it had retained investment banking firm Donaldson, Lufkin & Jenrette Inc. to help it find a buyer.

Then in January it re-tooled its accounting methods, driving that quarter's earnings down more than 25% from the same quarter a year earlier. Aames said then that it would begin selling more of its loans for cash on a wholesale basis, rather than securitizing them, to generate more predictable earnings.

The company's earnings announcement last week revealed a renewed reliance on securitization. Aames securitized $625 million of loans in the three months and sold $72 million for cash. Total loan production for the quarter was $674 million, up from $644 million a year ago.

"Yes, volume was strong, but I have this issue with gain-on-sale," Ms. Scutti said. "They are not doing what they said they were going to do."

In March investors Ronald Perelman and Gerald Ford bought a 10% stake in the company, prompting talk that they would buy Aames outright.

Aames' not holding a conference call after its earnings announcement fueled speculation that sale was near.

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