Shares of LendingClub Corporation LC declined 4.7% following the release of its fourth-quarter and 2016 results. The company reported loss per share of 8 cents in the quarter, against earnings of 1 cent recorded in the prior-year quarter. The Zacks Consensus Estimate was loss of 9 cents.
Results in the reported quarter included several significant items. Including these, net loss on a GAAP basis came in at $32.3 billion as against net income of $4.6 million in the year-ago quarter.
For 2016, loss was 38 cents per share compared with loss of 1 cent in 2015. On GAAP basis, net loss was $146 million, wider than the net loss of $5 million in the prior year.
Lower Revenues, Rise in Costs Hurt Bottom Line
Total net revenue fell 3.7% year over year to $130.5 million in the reported quarter. The fall was due to a decrease in all revenue components, except servicing fees. However, the figure outpaced the Zacks Consensus Estimate of $122 million.
For 2016, total net revenue was $500.8 million, an increase of 16.5% from 2015.
Total operating expenses were $163.0 million, a jump of 25% from the prior-year quarter. The increase was triggered by rise in all expense components.
Adjusted loss before interest, taxes, depreciation, and amortization totaled $2.2 million, as against adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $24.6 million in the prior-year quarter.
In the reported quarter, loan originations were $1.99 billion, down 23% from the year-ago quarter.
As of Dec 31, 2016, cash and cash equivalents were $516 million, down nearly 1% from the prior quarter. Further, loans were down 2.3% sequentially to $4.31 billion. Total stockholders' equity summed $976 million, relatively stable from the Sep 30, 2016 level.
Based on the information available as of Feb 14, 2017, LendingClub provided the following outlook:
- Total net revenue in the range of $117–$122 million
- Adjusted loss before interest, taxes, depreciation, and amortization in the range of $10–$5 million
- Net loss in the range of $43–$38 million
- Total net revenue in the range of $565–$595 million
- Adjusted EBITDA in the range of $40–$55 million
- Net loss in the range of $84–$69 million
Results reflect the turmoil faced by the company during 2016. Also, given the lower volumes of loan in the reported quarter and dismal outlook for first-quarter 2017, it is expected that the headwinds shall continue hurting the company’s financials.
Currently, LendingClub carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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