Halifax Corporation (HX) Reports Q2 Loss of $0.26; Revenues Miss; Offers FY19 Revenue Outlook Below Consensus

Halifax Corporation (NASDAQ: HX) reported Q2 EPS of ($0.26), versus $0.00 reported last year. Revenue for the quarter came in at $3.62 million versus the consensus estimate of $45.75 million.

Mr. Xinming Zhou, Chief Executive Officer of Hexindai, commented, "This quarter was certainly challenging for us and the entire P2P sector as the overall market environment shifts around us. The industry is gradually weeding out firms who are financially weaker, fraudulent or unable to maintain compliance standards leaving only the best run remaining. One of the strategic pre-emptive steps we took during the quarter to stay one step ahead of the industry was to protect our existing investors as liquidity in the market tightened and demand for loan transfer products increased. In response, we reduced new loan offerings on our platform and placed a priority on promoting loan transfer products to increase their liquidity and meet the growing demand. While our top line decreased significantly as a result, these steps helped strengthen confidence in our platform and the loyalty of existing investors."

"We nevertheless outperformed the industry average across a number of metrics. Loan balance for the entire sector decreased 25% year-over-year and 17% sequentially during the quarter. This compares to the 88% year-over-year increase we saw and 11% sequential decrease we had during the same period. I believe this speaks to the strength of our platform, strict compliance standards, advanced risk management, product competitiveness, and the trust investors have in us."

"In the long run, regulatory changes will have a positive impact on the industry. We recently completed the submission of our P2P Compliance Self-Inspection Report as the first step and are nearing completion of step two out of the three for full compliance which involves under-going an onsite inspection of our operations by Beijing Internet Finance Association. Increased regulation will raise the barriers to entry and will create a healthier market environment across the sector. This will allow us to leverage our strong cash position and improved risk management, operational efficiency, and marketing capabilities to consolidate the market. Our ability to maintain stringent standards and prioritize our investors has increased our confidence in Hexindai's future and strengthened our ability to lead the P2P industry through this challenging time."

GUIDANCE:

Halifax Corporation sees FY2019 revenue of $66-70 million, versus the consensus of $199.83 million.

For earnings history and earnings-related data on Halifax Corporation (HX) click here.

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