Credit card issuer



fell Thursday after UBS Warburg downgraded the stock to hold from buy based on its recent price movement.

The shares were recently down 15 cents, or 2.4%, at $6.22 on the

New York Stock Exchange. UBS downgraded the stock after it moved within 10% of its $7 price target following a run-up over the last two months. Heading into Thursday's session, the stock was up 72% since Oct. 16 of this year.

Providian has spent the year scaling back both its loan portfolio and the number of people it employs after a harrowing foray into subprime lending battered its stock at the end of 2001. The company said in late October that it ended the third quarter with $19.4 billion in total managed credit card loans and 12.7 million accounts, compared with $19.6 billion in loans and 12.9 million accounts at the end of the second quarter of 2002. It also cut 1,000 people from its payroll over the same period.

Last quarter, the San Francisco company earned $42.1 million, or 15 cents a share, down from $57.2 million, or 20 cents a share, last year. UBS is projecting a fourth-quarter profit of 4 cents a share and full-year earnings of 22 cents a share. On average, Wall Street analysts are expecting the company to post profits of 8 cents and 33 cents, respectively, according to Thomson Financial/First Call. For fiscal 2003, UBS expects a net profit of 65 cents, compared with the consensus estimate of 68 cents.

"We remain optimistic about the company's turnaround story and continue to anticipate risk-adjusted margin improvement to drive EPS growth next year, a fact reflected in our 2003 EPS estimate," wrote UBS analyst Eric Wasserstrom in a research note.

"However, because we do not currently see any indication that margin improvement will be better than we have anticipated, we are not inclined to raise our earnings estimates at this time, and consequently view the shares as approaching fair value," Wasserstrom added.