UPDATE 2-First Cash profit beats Street on pawn loan growth

* Q1 EPS continuing ops $0.36 vs est $0.35

* Pawn receivables up 29 pct

* Affirms 2009 EPS view of $1.53-$1.59
(Adds details, CFO comments, stock movement)

By Supantha Mukherjee

BANGALORE, April 21 (BestGrowthStock) – Pawn and payday lender
First Cash Financial Services Inc (FCFS.O: ) posted a
first-quarter profit (Read more your timing to make a profit.) that narrowly beat estimates as strong
demand for pawn loans drove revenue.

“As we start the second quarter, we see continued growth in
pawn receivable portfolios, improving sales and a significant
pipeline of store openings over the balance of the year,” Chief
Executive Rick Wessel said in a statement.

Pawn receivables in the United States rose by 14 percent,
while in Mexico it saw a 46 percent growth.

U.S. payday lenders are focusing more on pawn lending and
are expanding their operations abroad, especially in Mexico,
where there is a big demand for such services.

“Our primary customer is the under-banked or unbanked
customer,” Chief Financial Officer Douglas Orr told Reuters by

“While in the United States, about 25 percent of the
population fits in that category, probably 75 percent of the
population is in that category in Mexico.”

The company is cashing in on its first mover advantage into
Mexico, from where it gets about half of its total revenue. It
now plans to open 65 to 75 pawn stores in 2010, mainly in

Loan volumes have seen a steady growth as rising gold
prices have encouraged a lot of borrowers to pawn gold for more
money, CFO Orr said.

First Cash said its jewelry scrap sales were up 26 percent
due to a 20 percent increase in the average selling price of
gold and a 3 percent rise in the jewelry scrap volume.

For the first quarter, the company earned $12.1 million, or
39 cents a share, compared with $11.2 million, or 38 cents a
share, a year earlier. Earnings from continuing operations were
36 cents a share.

Revenue rose 21 percent to $97.2 million.

Pawn receivables, from which the company earns service fees
and future inventories for sale, rose 29 percent to $56
Analysts were looking for a profit of 35 cents a share,
excluding items, on revenue of $93.0 million, according to
Thomson Reuters I/B/E/S.

First Cash also backed its 2010 earnings forecast of
between $1.53 and $1.59 a share.

Shares of the company were trading up 38 cents at $23.90
Wednesday in afternoon trade on Nasdaq.

Stock Market Money

(Reporting by Supantha Mukherjee in Bangalore; Editing by Anil

UPDATE 2-First Cash profit beats Street on pawn loan growth