* Q1 EPS $1.01 vs est $0.91
* Q1 total rev up 17 pct
* Sees Q2 EPS of $0.63-$0.69
(Adds details, conference call and analyst comments, stock
By Supantha Mukherjee
BANGALORE, April 22 Pawn and payday lender Cash
America International Inc CSH.N reported first-quarter
earnings above analysts' expectations, helped partly by strong
performance in its cash advance business.
The company's cash advance segment revenue rose 40 percent
to $108.7 million in the quarter.
"There's a strong evidence that the payday business is
benefiting as a result of the Card Act," Macquarie Securities
analyst Bill Carcache said.
Provisions from legislation known as the Card Act, signed
into law in May, restricts the ability of card issuers to
charge fees and raise rates, especially on existing balances.
That means card companies will increasingly focus on
borrowers with clean payment histories, as they become less
willing to bet on returns from risky borrowers.
The company, which offers cash-advance products through
stores and online platform, said it is beginning to see
customers fall out of the bottom tier of the banks as the
lenders have reduced credit limits and cancelled credit cards.
"We would expect to see these disenfranchised customers
appear online," Chief Executive Daniel Feehan said on a
Cash America said its U.S. online cash advance business had
restored a great deal of the assets it lost in early 2009 and
posted 20 percent growth in operating income.
The company also said its pawn business in the United
States benefited from the higher personal federal income tax
refunds, which resulted in higher merchandise sales.
Once the customers get their tax refund and go to pay off
their loans, they also tend to buy something from the stores,
generating more profit for the company, analyst Carcache said.
On Wednesday, smaller rival First Cash Financial Services
Inc FCFS.O posted a better-than-expected profit as strong
demand for pawn loans drove revenue. [ID:nSGE63K0G0]
For the latest first quarter, the company posted net income
of $32.1 million, or $1.01 a share, compared with a profit of
$24.2 million, or 79 cents a share, a year earlier.
Total revenue rose 17 percent to $313.1 million.
Analysts on average were expecting earnings of 91 cents a
share, excluding items, on revenue of $297 million, according
to Thomson Reuters I/B/E/S.
The company forecast second-quarter earnings of 63 cents to
69 cents a share. Analysts were expecting earnings of 68 cents
Cash America shares were trading down 43 cents at $41.28
Thursday in midday trade on the New York Stock Exchange.
(Reporting by Supantha Mukherjee in Bangalore; Editing by Anil
D'Silva, Maju Samuel)