Portfolio Recovery Fourth Quarter Net Income Up 17 Percent on Record Revenues

Debt buyer and collector Portfolio Recovery Associates (Nasdaq: PRAA) announced late Thursday that it ended 2009 with record revenue, cash collections and a 17 percent increase in net income during the fourth quarter, cruising past analysts’ estimates.

The Norfolk, Virginia-based company said fourth quarter net income increased to $12.4 million, or $0.80 per diluted share during the period ended December 31, 2009, up from $10.6 million or $0.69 during the year ago period. Analysts had forecast earnings of $0.72 a share.  

Meanwhile, revenue climbed 9.3 percent during the period from the year-earlier to a record $73.2 million, and cash collections increased 20 percent to $95.3 million in the quarter.  

Portfolio Recovery said net income was the highest since the second quarter of 2007, with call center and other collections higher by 10 percent and purchased bankruptcy collections up 59 percent when compared with the year-earlier period.

"Portfolio Recovery Associates concluded a very challenging 2009 on a high note, producing strong fourth-quarter results that included solid earnings growth, record revenue and record cash collections. This was achieved in the face of a tepid economic recovery, seasonal weakness in consumer collections and a $9.5 million allowance charge recorded in the fourth quarter,” said Steven D. Fredrickson, Chairman, President and Chief Executive Officer.

Fredrickson added that the company purchased $2 billion of face-value debt during the fourth quarter for $75.1 million. He also said Portfolio Recovery improved collector productivity and took steps to strengthen its fee businesses.

“I remain excited about the opportunities that lie ahead for Portfolio Recovery Associates in the New Year," he said.

For the full year 2009, PRA earnings totaled $44.3 million, or $2.87 per diluted share, compared with $45.4 million, or $2.97 per diluted share for 2008. Full year 2009 revenue was $281.1 million, compared with $263.3 million in 2008.

“Looking forward, we believe our strong financial position and continued access to capital will help position us well to take advantage of opportunities for continued portfolio acquisitions as we move further into 2010," said Kevin P. Stevenson, Chief Financial and Administrative Officer.