Cash America Lifts Q1 EPS Forecast Above View; To Evaluate Possible Spin-off

(RTTNews) - Specialty financial services firm Cash America International, Inc. (CSH) Thursday said it expects first-quarter earnings to be above its previously announced expectations.

The company now expects net income per share to be in the range of $1.50 to $1.55 per share for the first three month period, which exceeds the $1.25 per share that was the top of its previously published estimate. On average, 11 analysts polled by Thomson Reuters expect earnings of $1.20 per share for the quarter. Analysts' estimates typically excludes special items.

The company attributed the positive revision primarily to lower loan losses in its online consumer loan portfolio, greater retail sales net proceeds and better operating efficiencies in its retail lending services business.

Separately, Cash America announced that its Board of Directors has authorized management to review potential strategic alternatives, including a tax-free spin-off, for the separation of its online lending business that comprises its e-commerce division, Enova International, Inc.

The company noted that while a final decision has not been made, a spin-off would create a stand-alone, publicly traded online lending company with approximately $766 million in annual revenue as of December 31, 2013.

If a spin-off were to occur, the company would be separated into two publicly traded companies. Enova International, Inc. would own and operate the online lending business with operations in the U.S., the U.K., Australia and Canada, and Cash America International, Inc., would own and operate the storefront lending businesses that comprise its retail services division, with more than 1,000 locations operating in the U.S. and Mexico.

The company added that if a spin-off were to occur, David Fisher, who has been Enova's Chief Executive Officer since January 2013, would continue to serve in that role.

The company will analyze the potential separation and expects to make a final recommendation to its Board of Directors in 2014. If the Board approves a separation, a transaction would likely be completed in late 2014 or early 2015, subject to market, regulatory and other conditions.

The company currently expects that any spin-off would be in the form of a tax-free distribution of at least 80 percent of the Enova common stock to the Company's shareholders.