Providian lowers forecast
Christian Berthelsen, Chronicle Staff Writer
Wednesday, September 5, 2001
Shares of Providian Financial Corp. plummeted more than 22 percent
yesterday after the San Francisco credit card company lowered its
2001 earnings expectations.
Citing a slowdown in consumer spending and loan demand, the company
said it now expects to earn $3.20 to $3.25 per share this year
instead of the $3.45 per share it had expected at the start of this
year. The company also lowered its expected long-term growth rate
from 25 to 15 percent.
Providian also commented on a change in the accounting method it
uses to recognize bankruptcy-related losses that was implemented in
June. Analysts and investors in the company were annoyed that
Providian did not disclose the change when it announced
Providian said yesterday that the change would not affect earnings,
but a hard-hitting research report by Banc of America Securities
said the change resulted in an understatement of its loss rate by
one-third of a percentage point in the second quarter, from 10.63 to
"We believe the timing of the change was suspicious," said the
report, written by analyst Caren Mayer. "We believe this impacts
I don't care for those who destroy the lives of Americans, whether by
use of force or financial shenanigans.
Karsten M. Self <email@example.com> http://kmself.home.netcom.com/
Praying for the victims.