third-quarter net income of $55 million, a 31% increase over the year-earlier period. Earnings per share at the commercial finance company matched analysts' estimates of 86 cents.
Finova's portfolio, which consists primarily of leases and loans to midsize businesses, grew at an annual rate of 27% during the third quarter, to $12.5 billion. In the third quarter of last year, growth was 20%, the firm said, stemming in part from a companywide cross-selling push, said chairman and chief executive Sam Eichenfield.
E. Reilly Tierney, an analyst with Fox-Pitt, Kelton in New York, said the company recovered strongly from the unusually high level of prepayments which occurred in the second quarter of 1999. The $415 million in prepayments, which primarily hit Finova's health-care portfolio, caused some analysts to downgrade the firm's stock. But in the third quarter, the prepayment figure dropped to $189 million, Mr. Tierney said.
"This part of Finova's story has been reaffirmed," he said. "The skeptics will hopefully believe that the last quarter was an aberration." -- Olaf de Senerpont Domis