Why DFC Global Corp. Shares Were Scrapped

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of DFC Global (NASDAQ: DLLR  ) , a company that provides financial services such as pawn loans and check cashing to underbanked consumers, plummeted as much as 28% after reporting its second-quarter financial results.

So what: For the quarter, DFC Global reported net revenue of $262.3 million, a 10.4% decline from the year-ago period, which the company blamed on an ongoing regulatory transition in the United Kingdom, weaker gold prices, and a weaker Canadian dollar, which impacts in currency translation of its most profitable business, also located in Canada. Total profit fell more than 90% to just $0.04 per share from $0.56 in the year-ago quarter. By comparison, Wall Street anticipated EPS of $0.19 for the quarter. Looking ahead, DFC Global dramatically reduced its full-year EBITDA and EPS guidance, and now anticipates reporting a profit of $0.35-$0.80 from prior guidance of $0.65-$1.27.

Now what: Yuck! You would seriously be hard-pressed to find anything that went right for DFC Global during the quarter. It was negatively affected by foreign-currency translation, lower gold prices, industry changes in the U.K., and excluding a one-time settlement would have seen its loan-loss provision for unsecured loans rise as well! The only positives I can wring out of this report are the 28% and 37.7% growth witnessed in Poland and Spain. Beyond that, I have no reason to believe this weakness was a one-quarter occurrence and would suggest sticking to the sidelines.

Instead of trying to catch a falling knife, perhaps you should check out this high-flying top stock instead
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report, "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2819215, ~/Articles/ArticleHandler.aspx, 9/1/2015 8:41:46 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Sean Williams

A Fool since 2010, and a graduate from UC San Diego with a B.A. in Economics, Sean specializes in the healthcare sector and in investment planning topics. You'll usually find him writing about Obamacare, marijuana, developing drugs, diagnostics, and medical devices, Social Security, taxes, or any number of other macroeconomic issues.

Today's Market

updated Moments ago Sponsored by:
DOW 16,058.35 -469.68 -2.84%
S&P 500 1,913.85 -58.33 -2.96%
NASD 4,636.11 -140.40 -2.94%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
DLLR $0.00 Down +0.00 +0.00%
Dollar Financial C… CAPS Rating: No stars