Credit-quality concerns and small-business woes continued to weigh on Advanta Corp., a specialist in small-business credit cards.
The Spring House, Pa., issuer reported Thursday that it swung to a third-quarter loss of $17.6 million, or 43 cents a share, from a profit of $19.48 million, or 47 cents a share, a year earlier. Its profits have fallen steadily over the past year.
Its business card results swung to a loss of $26.1 million, from a year-earlier profit of $22.1 million. Those losses were partially offset by a $8.42 million profit from "investment and other activities." Advanta also said it made a per-share profit of about 7 cents by selling its remaining shares in MasterCard Inc.
Advanta said it signed up about 18,500 new accounts in the quarter, down 75% from a year earlier.
Its transaction volume fell 8.9%, to $3.3 billion, and its managed chargeoff rate soared 19.3 percentage points from the previous quarter and more than doubled from a year earlier, to 10%.
Dennis Alter, Advanta's chairman and chief executive, said in a press release that the economic environment was affecting both small-business owners and his own company. "Not only are consumers spending less money with them, but their options for funding business inventories and obligations have shrunk," he said.
