Green Dot announced Thursday that its quarterly earnings fell 20% from a year ago as competition intensified in the prepaid card market.
The Pasadena, Calif., company said that its net income fell to $10.6 million in the third quarter, down from $13.3 million in the third quarter of 2011. Earnings per share fell to 24 cents, also a 20% drop from the year-earlier period.
"As predicted, new competition entered the market with large national banks and major retailers-including some of our largest retail partners-providing consumers with greater choices than ever in the prepaid debit card category," Green Dot chief executive officer Steve Streit said in a news release.
Green Dot released its results after the stock market closed, and shares were down almost 3% in after-hours trading.
Green Dot's revenues rose to $134.3 million, a 16% increase from the year-earlier period. The company highlighted the fact that the number of active Green Dot cards was also up, as was revenue per active card, compared to the third quarter of 2011.
Green Dot was an early leader in the prepaid card market, but more recently the field has been flooded with new entrants, including a recent foray from Wal-Mart and American Express.
Meanwhile, NetSpend Holdings, which also competes in the prepaid card market, announced that its net earnings fell to $4.4 million.
That was a 47% drop from the same period a year earlier, which NetSpend attributed to $10.3 million in litigation-related losses. Earnings per share fell to 5 cents, down from 9 cents in the third quarter of 2011.
Austin-based NetSpend saw its revenues climb to $84.9 million in the third quarter, as compared to the year-earlier period.
NetSpend also announced that it has signed a multi-year agreement with Intuit to provide prepaid card services with its TurboTax and QuickBooks products. Green Dot previously held the TurboTax program.