Debt collector Intrum's Q3 earnings miss estimates
Q3 adjusted EBIT falls to 951 million crowns, missing forecast
Servicing margin improves, but still short of 2026 target
Analysts call it a weak report
Shares fall 6% during early Stockholm trading
Updates and adds share price detail, paragraph 3-4, adds analyst comment and background, paragraphs 7-9
By Greta Rosen Fondahn
Oct 23 (Reuters) -Europe's largest debt collector Intrum INTRUM.ST reported third quarter earnings below expectations on Wednesday, driving its shares lower as investor concern persisted over the size of the company's own liabilities.
Adjusted operating profit fell 5% to 951 million Swedish crowns ($90.21 million) for the quarter ended Sept. 30, from 1.00 billion crowns a year earlier. That missed analysts' expectations of 1.04 billion crowns, a company-provided poll showed.
The share, Sweden's 10th most shorted stock, traded down about 6% during early trading in Stockholm.
Intrum shares have fallen by nearly 45% since the start of this year, as investor concern grew over the size of the bad loan manager's debts, which were 49 billion crowns at the end of September.
Margins in its servicing segment, a significant business area as Intrum aims to improve its profitability from collecting debt owed to others, grew to 18% in the reported quarter, compared with 12% last year.
This was above the 16% margin analysts expected, but shy of Intrum's overall target of a 25% annual servicing margin by 2026.
"We are starting to see the effect of our recent efficiency efforts with absolute costs coming down compared to last year," CEO Andres Rubio said in a statement, but added further efforts could be needed.
In a note, Arctic Securities analysts called it a weak report overall.
"Servicing sees significant margin expansion but underwhelming organic growth," the brokerage added.
Seeking to restructure its finances, Intrum said last week it would file for voluntary Chapter 11 bankruptcy protection in the United States, as 73% of its bondholders supported a recapitalisation plan that includes pushing maturities forward, trimming some debt and issuing new equity.
($1 = 10.5419 Swedish crowns)
Reporting by Greta Rosen Fondahn; Editing by Jacqueline Wong, Rashmi Aich and Barbara Lewis
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