Profits at the prepaid card issuer Green Dot fell sharply in the fourth quarter but still came in higher than analysts had expected.
The Pasadena, Calif., company said after markets closed Jan. 31 that its fourth-quarter earnings declined by 23.5% from a year earlier, to $10.4 million, due largely to higher marketing and employee expense. Still, its per-share earnings of 24 cents came in 7 cents higher than consensus estimates of analysts polled by Bloomberg.
The company is facing stiff competition from JPMorgan Chase, American Express and others and it has been investing in new products and partnerships to keep pace. For the quarter, its expenses rose 26%, $122.8 million, and for the full year they climbed 23%, to $474 million.
The investments, though, appear to be paying off in revenue growth. The company's total operating revenue grew by 17% for the full year, to $546.3 million, and 15% for the quarter, to $137 million.
"Our double-digit revenue growth during the fourth quarter is indicative of the strength and resiliency of the Green Dot brand at a time when consumers have greater product choices than ever in prepaid and adjacent categories," said Green Dot's chairman and chief executive Steve Streit, in an earnings release.
The company continues to test out new products in an effort to distinguish itself from its rivals; in January, it launched the beta version of its mobile consumer checking account, Go Bank.