Encore Capital Group, the San Diego-based buyer of defaulted credit card debt, reported net income of about $20.3 million on revenues of $290.9 million in the second quarter of 2017.
Revenues at Encore (Nasdaq: ECPG) were up from $289.4 million in the same quarter of the previous year.
“The domestic debt market continues to grow in supply and provides for a favorable purchasing environment,” said Ashish Masih, president and CEO. “Liquidation improvement initiatives are delivering sustained improved collections performance in the U.S. and in Europe over a wide array of vintages, allowing us to record better returns and increase expectations for future collections.”
Expenses also rose, totaling $210.3 million as compared to $197.7 million in the second quarter of 2016. The company attributed the 6 percent increase in operating expenses to higher legal collections spending in the United States.
Estimated remaining collections grew to $6.26 billion in the second quarter, an increase of $719 million compared to the same quarter in 2016, while gross collections rose 3 percent to $446 million in the second quarter compared to $434 million in the same period last year.
Earnings per share was 78 cents compared to $1.15 in the same period of the prior year.
Encore said the process of taking one of its subsidiaries, Cabot Credit Management, public on the London Stock Exchange remained on track.
Upon Cabot’s IPO, Encore would relinquish board control and deconsolidate the subsidiary, a move which would “significantly change” Encore’s financial statements, Manish said in the company’s Aug. 3 earnings call.
“We believe this will make it much easier for investors to understand Encore’s true financial condition,” he said.