In Brief: Beneficial Profits Jump 86% on Canada Sale

Beneficial Corp. reported first-quarter earnings of $187.5 million, or $3.34 per share, up 86% from a year earlier, largely on the sale of a Canadian subsidiary.

The earnings, partly offset by a $7.7 million addition to tax reserves, were the highest for any quarter in Beneficial's history.

Included was a gain of $110.8 million, or $1.99 per share, from the sale of its Canadian consumer finance subsidiary to Associates First Capital Corp.

The results were achieved despite a fall in net after-tax profits of the company's tax refund anticipation loan business, to $25.6 million ($42.6 million pretax), from $42.1 million ($70.1 million pretax) a year earlier. This was caused by Internal Revenue Service-delayed payments to some taxpayers claiming an earned income tax credit.

Beneficial said it is likely that some additional refund loan profits will be recorded this year, but full-year earnings in this area are expected to be about $50 million pretax, compared with $73 million pretax for 1997.

Discounting the Canadian gain-on-sale, the addition to tax reserves, and the full impact of refund loan profits in both years, earnings declined 13%, chiefly reflecting an increase in the loan-loss reserve percentage.