SAN FRANCISCO, Oct. 11 /PRNewswire/ -- Providian Financial Corporation
(NYSE: PVN) today reported it expects third quarter earnings to be lower than
previous guidance of $0.82 to $0.84 per diluted share. The Company cited
three primary factors: actions to strengthen the balance sheet in
anticipation of continued weak credit conditions, lower than expected fee and
finance charge revenue in September, and higher than expected credit losses in
September. Actions to strengthen the balance sheet include an incremental
loan loss provision of approximately $186 million and a charge of
approximately $85 million to recognize the estimated uncollectible portion of
accrued finance charges, and to increase the estimate of uncollectible fees,
on accounts which are 90+ days delinquent. Previously, these finance charges
and fees were reversed against current revenue upon charge-off of the related
account. The results also include a $23 million gain from the early
extinguishment of debt. Based on preliminary numbers, the Company now expects
earnings to be in the range of $0.19 to $0.21 per diluted share. The managed
net credit loss rate is expected to be approximately 10.33% for the quarter.
The Company will announce its third quarter results and revised guidance
for the fourth quarter on October 18th after the close of the market. Until
that release, the Company does not plan to provide further updates.
Statements contained herein as to the Company's expectations and goals are
forward-looking statements under the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
projected. Among the significant risks and uncertainties are: competitive
pressures arising from aggressive competition from other consumer lenders;
factors that affect the delinquency rate on the Company's consumer loans and
the rate at which the Company's consumer loans are charged off; the Company's
ability to grow its consumer loan portfolio; changes in the cost and
availability of funding due to changes in the deposit, credit or
securitization markets, or the way in which the Company is perceived in such
markets; the effects of government policy and regulation, including
restrictions and/or limitations arising from banking laws, regulations and
examinations; legal proceedings; and the ability to attract and retain key
personnel. More information on risk factors affecting the Company is
available in the Company's filings with the Securities and Exchange
Commission, including its annual report on Form 10-K, quarterly reports on
Form 10-Q, and current reports on Form 8-K.
SOURCE Providian Financial Corporation
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Related links:
http://www.providian.com
CONTACT:
media, Alan Elias, +1-415-278-4189, or
investors, Nancy Murphy, +1-415-278-4483, or Jack Carsky,
+1-415-278-4977, or Bill Horning, +1-415-278-4602, all of
Providian Financial Corporation
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