RCII Expands Share Buyback Program - Analyst Blog
29 4월 2013 - 7:30PM
Zacks
Rent-A-Center Inc.
(RCII) announced that it has enhanced its current share repurchase
authorization to $1.25 billion from $1 billion.
Since the inception of the share
buyback program, the company has repurchased 31,585,314 shares for
approximately $794.8 million. Moreover, it bought back 465,035
shares for approximately $17.4 million during the last reported
quarter.
The announcement comes at a perfect
time when the company badly needs to restore the confidence of its
investors in the stock, following its disappointing first-quarter
performance.
Earlier last week, Rent-A-Center
delivered first-quarter 2013 earnings of 80 cents a share that
missed the Zacks Consensus Estimate of 85 cents, and dropped 8%
from 87 cents earned in the prior-year quarter. Total revenue
fell 1.9% to $819.3 million from the year-ago quarter and fell
short of the Zacks Consensus Estimate of $850 million.
Rent-A-Center’s gross profit
tumbled 1.7% to $550.7 million, while gross margin expanded 10
basis points to 67.2%. Operating profit fell 13.9% to $79.3
million, whereas operating profit margin contracted 130 basis
points to 9.7%. Adjusted EBITDA decreased 11.4% to $98.6 million,
while adjusted EBITDA margin shriveled 130 basis points to 12%.
Following its sluggish performance,
Rent-A-Center now projects 2013 top-line growth of 3.5% to 5.5%,
attributable to a contribution of $540 million from the RAC
Acceptance business. Management forecasts comparable-store sales
growth ranging from 1% – 2% for 2013.
Earlier, Rent-A-Center had expected
total revenue growth of 5% to 8%, and comps increase of 2% to 4% in
2013.
Management now envisions 2013
earnings in the band of $2.95 to $3.10 per share, including a cost
of 25 cents related to its international expansion initiatives.
Earlier, management had projected 2013 earnings between $3.25 and
$3.40 per share. Management also forecasted a 50 basis points
contraction in gross profit and operating margins for 2013.
Following the company’s trimmed
outlook, shares of Rent-A-Center maintain a Zacks Rank #4
(Sell).
Other Stocks to
Consider
Until any further upgrade on the
Zacks Rank of Rent-A-Center, other stocks worth considering in the
finance-leasing industry are AeroCentury Corp.
(ACY), KCAP Financial, Inc. (KCAP) and
American Capital, Ltd. (ACAS), all holding a Zacks
Rank #1 (Strong Buy).
AMER CAP LTD (ACAS): Free Stock Analysis Report
AEROCENTURY CP (ACY): Get Free Report
KCAP FINL INC (KCAP): Free Stock Analysis Report
RENT-A-CENTER (RCII): Free Stock Analysis Report
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