LendingClub Corp (LC) Shares Sink on Q4 Earnings Miss

LC shares fell nearly 8% after the bell

By Karl Utermohlen, InvestorPlace Writer Feb 20, 2018, 4:41 pm EST February 20, 2018

LendingClub Corp (NYSE:LC) announced its quarterly earnings results late Tuesday afternoon, posting a wider-than-expected loss.

For its fourth quarter, the peer-to-peer lending company reported a loss of $92.1 million, or 22 cents per share, which was almost three times as large as the year-ago loss of $32.3 million, or 8 cents per share.

Part of Lending Club’s lack of success in the quarter came from a class-action litigation settlement expense of $77.25 million during the period following a series of class-action lawsuits filed in federal and California state courts. These arose from some legacy issues disclosed in 2016.

On an adjusted basis, the company posted earnings of a penny per share, compared to a loss of 2 cents in the year-ago quarter. Analysts were calling for adjusted earnings of 2 cents per share, according to data compiled by FactSet.

Lending Club also underwhelmed in its revenue as the company raked in $156.5 million during its fourth quarter, below Wall Street’s consensus estimate of $157.6 million, according to FactSet. The figure did increase 20% compared to the year-ago quarter.

The company also experienced a 23% annual growth in originations, which reached over $2.4 billion. Some of Lending Club’s highlights during the period included the addition of a new feature that enables borrowers to directly pay off credit card debt to improve loan performance, as well as Club Certificates, a marketplace lending product that opens up the asset class to new investors.

LC stock plummeted about 7.99% after the bell Tuesday.

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