EZCorp warns on third-quarter outlook, cites falling gold prices
July 1 (Reuters) - Pawn and payday lender EZCorp Inc said it expects to fall short of its third-quarter profit forecast as plunging gold price crimps margins, sending its shares down 8 percent.
The company said it would take a charge of between $21 million and $24 million in the third quarter and expects second-half earnings to be hit by 35 cents or more.
Gold prices have been falling amid worries of the Federal Reserve ending its stimulus plan, leading to panic selling of the precious metal.
"We continue to have a very large and successful gold business and expect that we will monetize more gold through our retail sales channels where margins are substantially higher than our scrap margins," Chief Executive Officer Paul Rothamel said.
EZCorp had expected to earn between 47 cents and 52 cents for the third quarter. Analysts had expected earnings of 49 cents, according to Thomson Reuters I/B/E/S.
Shares of the company, which have declined about 26 percent in one year, fell 8 percent to $15.57 in morning trading on the Nasdaq.