WRAPUP 2-Aaron's, Rent-A-Center Q3 tops Street, upbeat on 2011
* Rent-A-Center sees FY11 adj EPS $2.85-$3.05 vs est $2.89
* Rent-A-Center Q3 EPS $0.62 vs est $0.55
* Aaron's sees FY11 adj EPS $1.54-$1.70 vs est $1.60
* Aaron's Q3 adj EPS $0.32 vs est $0.30 (Recasts; adds fiscal 2011 outlook, analyst comment)
By Abhishek Takle
BANGALORE, Oct 25 (Reuters) - Rent-A-Center Inc (RCII.O) and Aaron's Inc (AAN.N) posted strong quarterly results and forecast 2011 earnings largely above market expectations as credit constraints continue to lead consumers to rent rather than buy household appliances.
The companies allow customers to own products they have rented after they complete all payments over an agreed term.
Rent-A-Center has beaten earnings expectations for eight consecutive quarters, while Aaron's has exceeded expectations in all but one of the past nine quarters.
"Traffic trends are good and I think it's perhaps some early signs of how the credit constraints (still present) in the economy are starting to help these companies more and more," Sterne, Agee & Leach analyst Arvind Bhatia told Reuters.
Aaron's expects 2011 earnings per share of $1.54-$1.70. Analysts were looking for $1.60 a share.
Rent-A-Center forecast earnings of $2.85-$3.05 a share on sales of $2.81-$2.87 billion for 2011. Analysts were expecting the company to earn $2.89 a share on revenue of $2.8 billion.
While Rent-A-Center, the larger of the two rent-to-own operators, reported a second-quarter profit that surpassed Wall Street estimates by 7 cents per share, Aaron's profit beat Wall projections by 2 cents per share.
Rent-A-Center's quarterly revenue of $664.6 million beat analysts expectations of $661.1 million. Aaron's sales of $452.2 million also surpassed market estimates of $437.2 million, according to Thomson Reuters I/B/E/S.
Both companies posted increases in quarterly sales at stores open at least year. [ID:nASA00VTE] [ID:nASA00VT0]
Aaron's shares have shed a more than a quarter of their value over the past six months, while Rent-A-Center shares have lost 4 percent in the same period.
Shares of Rent-A-Center closed at $23.26 Monday on Nasdaq, while Aaron's shares closed at $17.70 on the New York Stock Exchange. (Reporting by Abhishek Takle in Bangalore; Editing by Anne Pallivathuckal)