2017 was a tough year for PRA Group (NASDAQ:PRAA). With the economy firing on all cylinders, debt collection hasn't been as lucrative a business as it often is during tougher economic times. That has forced the company to look toward other ideas to expand its business.

Coming into Tuesday's fourth-quarter financial report, PRA Group investors wanted to see the company turn things around from difficult conditions in the recent past, and the debt collector largely met those expectations. Let's look more closely at PRA Group and what its latest results say about its prospects.

Logo for PRA Group, with three squares of different colors overlapping.

Image source: PRA Group.

Sales climb big for PRA Group

PRA Group's fourth-quarter results marked a nice change from what the company has seen recently. Total revenue soared by 32% to $205.7 million, which was even better than the consensus forecast for roughly 30% growth from the company. Net income reversed a year-earlier loss, coming in at $86.9 million, and that worked out to earnings of $1.92 per share.

Tax reform had a significant positive impact on PRA Group's financials. The company claimed a $73.2 million net after-tax benefit from the Tax Cuts and Jobs Act, with revaluation of deferred tax liabilities helping to turbocharge bottom-line growth for the debt collection specialist at the end of 2017.

Yet PRA Group also got some benefits from strong fundamental business performance. Cash collections climbed 8% from year-ago levels, with insolvency-related collections in the Americas climbing at an even healthier 12% pace. Core cash collections in Europe rose 10% compared to a 6% rise in the Americas. Much of the rise in PRA's overseas business came from currency impacts, but even after accounting for favorable foreign exchange movements, European collections were higher by almost 3%. Hiring in U.S. call centers also helped to bolster overall numbers.

Acquisitions played a key role for PRA Group during the quarter. The company spent $347.6 million on new finance receivables, almost doubling what it spend this time a year ago. Acquisitions were roughly evenly split between the Americas and Europe, with an emphasis on core collections business going forward. Yet PRA still has plenty of work to do, with about $5.7 billion yet to collect on its current receivables.

CEO Kevin Stevenson celebrated a strong end to the year. "We raised capital to prepare for additional portfolio investment," Stevenson said, "invested record amounts in Americas Core and Americas Insolvency, announced the opening of two new call centers in the U.S., added over 1,100 net new full-time U.S. based collectors, and collected more cash than ever in Europe Core."

Can PRA Group keep it up in 2018?

PRA has high hopes for the future. With more than 2,725 full-time U.S. based collectors, the debt specialist sees a lot of potential in attacking the domestic market. That number is up more than 70% from PRA's domestic headcount in the fourth quarter of 2016. With so much opportunity, PRA isn't letting good conditions go to waste.

The impressive thing about PRA's moves is that the company is achieving success without breaking the bank. Substantial operating expense increases during the fourth quarter came from having to bring on so many new employees. Yet for the full 2017 year, operating expenses were down 2%, as legal collection costs fell in part because of its more efficient handling of debt collection activities without having to resort to court proceedings.

PRA Group investors seemed content with the news, and the stock climbed about half a percent in after-hours trading following the announcement. The environment for debt collection seems to be going strong, and as long as that continues, PRA Group looks poised to keep building up its business in 2018 and beyond.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends PRA Group. The Motley Fool has a disclosure policy.