EZCorp shares fall on lower earnings guidance

BOSTON (AP) — Shares of Ezcorp Inc. tumbled on Friday after the pawn shop owner and payday lender cut its 2009 earnings guidance, citing slumping demand for its loans and used merchandise.

Shares of Austin, Texas-based Ezcorp fell $1.96, or 15 percent, to $10.93 in morning trading. The stock has traded in a 52-week range of $9.50 to $19.25.

After markets closed Thursday, Ezcorp said it now expects earnings in the fiscal third quarter of 29 cents to 31 cents per share, down from previous guidance of 34 cents per share, which had matched analysts' expectations.

For the fourth quarter, the company now expects a profit of 41 cents to 43 cents per share, compared with prior estimates of 46 cents to 48 cents per share. Analysts surveyed by Thomson Reuters have forecast profit of 46 cents per share, on average.

Joe Rotunda, Ezcorp's president and chief executive, said U.S. demand for loans and used merchandise has recently fallen below expectations.

In a research note, Roth Capital Markets analyst Elizabeth Pierce called the lowered guidance disappointing. But she also noted that, even with the reduced expectations, Ezcorp's expected full-year earnings would be up 16 percent to 19 percent compared with a year ago.

Pierce wrote that "it is not surprising that payday revenues would be under pressure, given the rising unemploymentfigures."