Two debt buyers reported July 29 that second-quarter profits topped Wall Street expectations.
Portfolio Recovery Associates (PRA) Inc.'s Q2 profit topped estimates as cash collections rose 41%. The company reported setting several records - including for cash collections, revenue and net income.
Asset Acceptance Capital Corp.'s quarterly profit beat estimates too, helped by a rise in revenue. Cash collections rose to $128 million from $90.5 million, in the year-ago quarter. The Warren, Mich.-based debt buyer purchased portfolios in the quarter with a face value of $1.5 billion.
Asset Acceptance is facing an investigation by the Federal Trade Commission, see story. The company's second-quarter profit stood at $774,457, or 3 cents a share, above analysts' estimates of 2 cents a share. The company earned $842,287 last year. Revenue in the recent quarter rose approximately 4% to $50.9 million, while cash collections fell 3.6% to $84.2 million.
The company reported on a post-earnings call that it expects higher-than-normal external legal expenses related to the investigation until the case is resolved.
PRA, based in Norfolk, Va., earned $19.5 million, compared with $11.7 million, in the year-ago quarter. Total revenue for the quarter rose 31% to $93 million.
PRA purchased $1.67 billion of face value debt in Q2 for $86.8 million. The 78 portfolios came from 11 different sellers.
Analysts on average expected earnings of 93 cents a share, on revenue of $85.8 million, according to Thomson Reuters. Portfolio Recovery said the rise in collections was led by bankruptcy portfolio collections which more than doubled to $43.7 million.