IRVINE, Calif. — A significant drop in third-quarter total operating expenses wasn't enough to offset a sharp decline in revenue, sending Consumer Portfolio Services to another pretax and net loss.

The company indicated this week its pretax loss for the third quarter was $3.5 million. In the year-ago quarter, CPS shared its pretax loss settled at $4.3 million. In terms of net loss, the company showed an amount totaling $4.5 million or 26 cents per diluted share. During the third quarter of last year, executives said the net loss was $4.3 million or 23 cents per diluted share.

CPS mentioned that its third-quarter net loss for this year also includes a charge to income tax expense of $1 million or 6 cents per diluted share, related to an addition to the valuation allowance against the deferred tax asset.

Management also revealed further details about how it arrived at its third-quarter loss.

CPS determined total operating expenses for period that ended Sept. 30 came in at $40.3 million. The figure marked a 29.5-percent decrease or $16.8 million from the year-ago quarter when the company's expenses were $57.1 million.

The company's third-quarter revenue settled at $36.8 million, a decrease of approximately $16 million, or 30.3 percent. In the third quarter of 2009, CPS posted $52.8 million in revenue.

Elsewhere in CPS latest financials, executives shared the value of contracts purchased from dealers during the third quarter.

The company indicated it purchased $35.3 million of contracts from dealers during the third quarter. The amount marked a sharp rise as compared with $26.7 million during the second quarter this year and $506,000 during the third quarter of 2009.

Executives determined the company's managed receivables totaled $843.0 million as of Sept. 30. The figure represented a decrease of $354.3 million, or 29.6 percent, from $1.197 billion at the same date last year.

CPS also touched on its annualized net charge-offs for the third quarter. The company found these net charge-offs were 6.98 percent of the average owned portfolio as compared with 8.82 percent in 2009.

Furthermore, the company's delinquencies greater than 30 days (including repossession inventory) were 8.64 percent of the total owned portfolio as of Sept. 30, as compared to 8.83 percent at the same juncture in 2009.

CPS emphasized the third quarter represents the second consecutive quarter that year-over-year portfolio net charge-off levels have improved since the company's managed portfolio began to decrease in 2008.

Chairman and chief executive officer Charles Bradley Jr. offered his assessment.

"Operational improvements continued in the third quarter with another significant increase in new contract purchases and favorable year-over-year credit performance levels," Bradley surmised.

"In addition, we successfully completed our first term securitization transaction in over two years, our first rated senior subordinate term deal since 1993, at rates competitive with our peers," he continued.

"Getting that deal closed should enhance our fund raising efforts in the near term and set the stage for lower funding costs in 2011," Bradley added.

Nine-Month Results

CPS also discussed how the company has performed during the first nine months of the year during its latest financial report. The results resembled the third-quarter trends — decreases in both revenue and expenses resulting in pretax and net losses.

CPS calculated its total revenue for the first nine months of 2010 came in at $119.9 million compared with $177.2 million during the same stretch a year ago. Executives said that's a drop-off of approximately $57.3 million, or 32.3 percent.

Meanwhile, the company determined total expenses through the nine months were $134.6 million, a decrease of $53.4 million, or 28.4 percent, as compared with $188 million for the nine months ended Sept. 30, 2009.

Those figures translated into CPS sustaining a pretax loss of $14.7 million, compared with pretax loss of $10.8 million for the first nine months of 2009.

In terms of net loss, the company reported it at $19.3 million, or $1.10 per diluted share. In the same time period last year, CPS' net loss was $10.8 million, or 57 cents per diluted share.

Executives reiterated that the net loss for the first nine months of 2010 includes a charge to income tax expense of $4.6 million or 26 cents per diluted share related to additions to the valuation allowance against the deferred tax asset.