Cash America International Inc CSH.N, which canceled a $500 million initial public offering of its online lending arm on Wednesday, warned it faces a disappointing full year, sending its shares sliding 20 percent.
The pawn and payday lender blamed the volatile markets for pulling the IPO of its Enova International unit and said pawn lending faced weak demand in the second quarter.
"Management expects growth in its pawn lending business but is more reserved about expectations for the remainder of 2012," the company said in a statement.
Pawn lending accounts for roughly 20 percent of the company's revenue. It operates pawn shops and payday chains in the United States and Mexico through Cash America Pawn, SuperPawn and Cashland stores.
The company projected net income between 95 cents and $1.05 per share for the quarter, and $4.35 and $4.60 per share for the year.
Analysts had expected earnings of $1.25 per share for the quarter and $4.97 for the year, according to Thomson Reuters I/B/E/S.
The company also expects to book a cost of $3 million, or 6 cents per share, in the third quarter related to the IPO withdrawal, it said in a statement.
Cash America was planning to list Enova to focus on growing its store-front pawn operations in the United States and Latin America.
Enova - which has operations in the United States, Canada, UK, and Australia - reported net income of $37 million on revenue of $480.3 million for the year.
Cash America's net income rose to $29.8 million, or 94 cents per share, for the second quarter, from $27 million, or 84 cents per share, a year earlier.
Revenue rose about 19 percent to $411.6 million.
Analysts on average expected the company to earn 97 cents per share, on revenue of $407.2 million.
Expenses rose 12 percent to $179.4 million.
Shares of the company were down 17 percent at $37.17 on Thursday afternoon. They had touched a low of $36.01 earlier in the session making them one of the top percentage losers on the New York Stock Exchange.
WORLD ACCEPTANCE BEATS
While Cash America and Ezcorp (EZPW.O) are struggling with loan demand, peer World Acceptance (WRLD.O) reported better-than-expected first-quarter earnings on higher loans.
It reported net income of $22.6 million, or $1.63 per share, while analysts' expected it to earn $1.50 per share.
Rival Ezcorp missed Wall Street estimates earlier this week and said full-year earnings would be at the lower end of its previously announced range.
World Acceptance's shares touched a 52-week high of $76.52 in morning trade on the Nasdaq.
(Reporting by Eileen Anupa Soreng and Jochelle Mendonca in Bangalore; Editing by Supriya Kurane and Anil D'Silva)