FORT WORTH (AP) – Cash America International Inc. has cut its fiscal 2011 earnings forecast, partly because of higher-than-expected costs.
The payday lender and pawn-shop operator said late Tuesday that it expects earnings of about $4.25 per share for the year, down from between $4.28 and $4.48 per share. Analysts surveyed by FactSet had expected $4.40 per share.
Cash America said fourth-quarter revenue should rise more than 25 percent from last year’s $368.8 million.
The Fort Worth, Texas company said revenue from merchandise sales grew sharply. Its performance was also helped by growth in asset balances of pawn and consumer loans.
Revenue from online consumer loans rose more than 40 percent, but Cash America said that meant it was required to immediately create a reserve for loan losses and absorb all marketing and customer acquisition costs, which held back profit gains.
The company also faced higher-than-expected store operating costs during the holiday season and experienced a lower-than-expected gross profit margin related to merchandise sales. There were also a number of one-time expenses during the quarter tied to its proposed Enova initial public offering and other expenses related to an acquisition’s closing.
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