Bitcoin price today: gains to $120k, near record high on U.S. regulatory cheer
Investing.com -- Shares of Encore Capital Group (NASDAQ:ECPG) dropped 23% after the company reported a significant fourth-quarter loss that fell short of Wall Street expectations. The international specialty finance company posted a fourth-quarter earnings per share (EPS) of ($9.42), which starkly contrasted with the analyst estimate of $1.83. Revenue for the quarter was also below the consensus estimate, coming in at $265.62 million against the expected $372.15 million.
The decline in Encore Capital’s stock follows the release of their consolidated financial results for the fourth quarter and full year ended December 31, 2024. Despite the company highlighting a year of significant growth with a 26% increase in global portfolio purchases and a 16% rise in global collections compared to 2023, the financial results told a different story. The company’s net loss for the year was reported at $139 million, or ($5.83) per share, a figure that the company attributes to non-cash charges including a $101 million goodwill charge related to restructuring actions in their Cabot (NYSE:CBT) business in the UK and Europe.
The restructuring included exits from underperforming markets and adjustments to Cabot’s estimated remaining collections (ERC), particularly in the fourth quarter. These adjustments resulted in a substantial write-down and a reported net loss for the quarter of ($225.3 million), or ($9.42) per share.
Citizens JMP analyst David Scharfain provided some perspective, maintaining a Market Outperform rating but lowering the price target on Encore to $55.00 from $65.00. Scharfain noted, "While the Cabot operations, which are heavily concentrated in the UK credit card market, continue to face supply headwinds, the $129M write-down in PV of expected future recoveries looks to have baked in appropriate conservatism." He also pointed out that the company’s U.S. business remains in a cyclical sweet spot, with strong collections growth supported by a stable macroeconomic environment.
Looking ahead, Encore Capital’s management remains committed to their financial objectives and capital allocation priorities. They anticipate global portfolio purchases in 2025 to exceed the $1.35 billion made in 2024 and expect global collections to increase by 11% to $2.4 billion. The company also plans to resume share repurchases in 2025.
The stark contrast between the company’s optimistic outlook and the actual financial results, particularly the unexpected fourth-quarter loss, has led to the sharp decline in Encore’s stock price during the trading session.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.