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What's happening

Shares of OneMain Holdings Inc (NYSE:OMF) are are down 38% as of 1:22 p.m. EST on Tuesday after the company slashed guidance in its third-quarter earnings. Meanwhile, shares of Fortress Investment Group (NYSE:FIG), which holds a majority stake in the company in its managed funds, are also down by about 3.5%.

So what

OneMain Holdings slashed guidance for the full-year 2016 and 2017 with respect to the growth in its loan portfolios and its preferred measure of earnings. The table below summarizes the change in guidance.

 Metric

Previous Guidance

New Guidance

Receivables growth in 2016

10% to 15%

5%

Receivables growth in 2017

10% to 15%

5% to 10%

C&I adjusted diluted EPS in 2016

$4.20 to $4.70

$3.60 to $3.70

C&I adjusted diluted EPS in 2017

$5.60 to $6.10

$3.75 to $4.00

Source: OneMain's Q3 2016 earnings presentation.

The company called out increasing competition for loans to borrowers with sub-660 FICO scores for slowing receivables growth, specifically mentioning credit card companies, which have targeted lower-FICO borrowers. While OneMain isn't a credit card issuer, its customers can use cards as a substitute for its core small-dollar unsecured and secured loans.

Now what

The company was previously known as Springleaf. It adopted its new name after closing on the acquisition of OneMain -- then its biggest competitor -- in 2015. Integrating these two companies is proving to be a challenge.

In prepared remarks, one executive noted that "the amount of change we asked of our branch team members simply kept them from bringing a historical level of focus on new business and collections," referring to the company's employees engaged in origination and collection.

That would suggest that weakness in guidance may be short-lived, but the market isn't buying it today, as evidenced by the sharp drop in the company's stock.

Jordan Wathen has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.