Portfolio Recovery Associates Inc., a Norfolk, Va. debt buyer, reported a quarterly profit above Wall Street expectations as cash collections rose 33%. The company attributed the gain to a shift in its collection mix to bankrupt accounts, and seasonal strength in the quarter.
Net income for the first quarter ended March 31 was $14.8 million, compared with $10.1 million in the year-ago quarter. Total revenue for the quarter rose 22% to $83.4 million. The company incurred an allowance charge of $6.9 million Q1, or 26 cents a share, against certain pools of finance receivables accounts. Analysts expected the company to earn 86 cents a share, on revenue of $78.9 million, according to Thomson Reuters.
Cash collections rose to $119.2 million from $89.9 million, in the year-ago quarter. Earnings for the industry, which is in the business of debt recovery and related services, are driven primarily by cash collections.
Portfolio Recovery Associates is the sixth-largest debt buyer in the U.S. with more than $206 million in revenue from purchased debt in 2008, according to research conducted by
Last month, the company announced it acquired a controlling interest in Claims Compensation Bureau, a firm that specializes in recovering funds and processing payments owed under class-action settlements,
For an early 2010 report on the state of the debt-buying industry,
