EZCORP - Executing Well, Raising Guidance For '09

By: TraderMark Thursday, November 06, 2008 9:47 PM

Sectors: Finance

Symbols: EZPW

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EZCORP (EZPW) continues to execute and we have some upside to their fiscal 2009 (which starts now; their year end is Sept 30th) based on some acquisitions. While I don't agree with counting Hurricane Ike as not part of their EPS, this is the game as they play it on Wall Street. It was a one time event, but so was this tax credit they took to "make the number". More important are the longer term trends which continue to be positive.

Analysts were in at $118M on revenue and $0.34 EPS

For the quarter ended September 30, 2008, EZCORP’s net income increased 44% to $16,031,000 ($0.37 per share) compared to $11,155,000 ($0.26 per share) for the quarter ended September 30, 2007. Total revenues for the quarter increased 19% to $123,402,000 while operating income improved 13% to $18,950,000.
Included in the results for the quarter are the impact of Hurricane Ike and the benefit of taking a previously under utilized foreign tax credit. On September 13^th, the Company closed 154 stores in the hurricane threat area, with most of these closed on September 12^th in advance of the hurricane. During the month, the Company lost 1,042 store days due to the hurricane and the resulting power outages. The Company estimates this adversely impacted pretax income approximately $2.5 million ($0.04 tax affected earnings per share).
During the quarter, the Company recognized the benefit of a previously under utilized foreign tax credit related to its investment in Albemarle and Bond Holdings Plc. This resulted in a reduction to income tax expense, not related to the quarter, of approximately $3.1 million ($0.07 per share).
Excluding the adverse impact of Hurricane Ike and the benefit of the foreign tax credit related to Albemarle and Bond’s earnings in prior periods, the Company’s fully diluted earnings per share for the fourth fiscal quarter and 2008 fiscal year would have been $0.34 and $1.19 per share. (so net of benefit from foreign tax credit, and Hurricane Ike they were "in line")
Our pawn operations in the U.S.