Magazine article American Banker

Refocus Bolsters Advanta's Net

Magazine article American Banker

Refocus Bolsters Advanta's Net

Article excerpt

Advanta Corp. missed Wall Street expectations for the second quarter by a penny but said focusing on customers with good credit helped its business-card division.

Consolidated net income of $18.3 million, or 64 cents per diluted share, 66.4% more than a year earlier, the Spring House, Pa., credit card issuer said Tuesday.

Earnings of the business-card division, Advanta's main business, rose 25%, to $13.6 million, or 47 cents per share. In view of the improvement, Advanta reiterated its 2005 guidance of $1.85 to $1.95 per share and said it expects the actual figure to be near the top of that range.

The company took a one-time restructuring charge of 4 cents per share -- mostly for severance payments in an efficiency campaign, chief financial officer Phil Browne said Tuesday on a conference call.

The growth in business cards and improvements in credit quality resulted from targeting new types of borrowers, Mr. Browne said. Advanta has long been viewed mostly as a subprime issuer, but in recent years it has been trying to attract prime and superprime customers.

"Our mix shift ... continues to be toward higher-credit-quality, more active customers," Mr. Browne said. "We have a number of initiatives from a marketing perspective to encourage customers to spend more."

Chief executive Dennis Alter said Advanta is seeing strength in the market. "People generally spend and borrow and invest on confidence," Mr. Alter said. "The customers that we're attracting and the prospects to whom we market are . …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.