We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Credit Acceptance (CACC) Beats on Q1 Earnings, Costs Rise
Read MoreHide Full Article
Credit Acceptance Corporation’s (CACC - Free Report) first-quarter 2019 adjusted earnings of $8.08 per share handily outpaced the Zacks Consensus Estimate of $7.93. Moreover, the bottom line compared favorably with earnings of $6.11 reported a year ago.
Increase in revenues along with lower provision for credit losses supported results. Moreover, the balance sheet remained strong during the first quarter. However, an increase in expenses posed a headwind.
After taking into consideration certain non-recurring items, net income was $164.4 million or $8.65 per share, up from $120.1 million or $6.17 per share in the prior-year quarter.
Revenues Improve, Expenses Rise
Total revenues were $353.8 million, up 19.7% year over year. The increase was attributable to rise in all three revenue components. Also, the reported figure beat the Zacks Consensus Estimate of $351.9 million.
Operating expenses of $81.4 million rose 8.8% from the year-ago quarter. This rise was due to an increase in salaries and wages, and sales and marketing expenses.
Credit Quality: A Mixed Bag
Provision for credit losses decreased 38% year over year to $14.5 million. However, allowance for credit losses at the end of the reported quarter was $474.2 million, up from $461.9 million as of Dec 31, 2018.
Strong Balance Sheet
As of Mar 31, 2019, net loans receivable amounted to $6.1 billion, increasing from $5.8 billion as of Dec 31, 2018.
Total assets were $6.7 billion as of the same date, increasing from $6.2 billion on Dec 31, 2018. Also, total stockholders’ equity was $2 billion, up 2.9% from the end of the last reported quarter.
Our Take
Credit Acceptance is well poised for growth in revenues, given the continued rise in consumer loans. Furthermore, backed by a solid capital position, the company is expected to enhance shareholder value through continued share repurchases. However, increasing expenses might hurt bottom-line growth to some extent.
Credit Acceptance Corporation Price, Consensus and EPS Surprise
Capital One (COF - Free Report) reported first-quarter 2019 adjusted earnings of $2.90 per share, which easily surpassed the Zacks Consensus Estimate of $2.68. Also, it compared favorably with the year-ago quarter’s adjusted earnings of $2.65.
Sallie Mae (SLM - Free Report) delivered a positive earnings surprise of 13.3% in first-quarter 2019. The company reported core earnings of 34 cents per share, surpassing the Zacks Consensus Estimate of 30 cents. Moreover, the figure rose 25.9% from the prior-year quarter.
Ally Financial Inc.’s (ALLY - Free Report) first-quarter 2019 adjusted earnings of 80 cents per share surpassed the Zacks Consensus Estimate of 79 cents. Further, the bottom line compared favorably with the prior-year quarter’s figure of 68 cents.
Is Your Investment Advisor Fumbling Your Financial Future?
See how you can more effectively safeguard your retirement with a new Special Report, “4 Warning Signs Your Investment Advisor Might Be Sabotaging Your Financial Future.”
Image: Bigstock
Credit Acceptance (CACC) Beats on Q1 Earnings, Costs Rise
Credit Acceptance Corporation’s (CACC - Free Report) first-quarter 2019 adjusted earnings of $8.08 per share handily outpaced the Zacks Consensus Estimate of $7.93. Moreover, the bottom line compared favorably with earnings of $6.11 reported a year ago.
Increase in revenues along with lower provision for credit losses supported results. Moreover, the balance sheet remained strong during the first quarter. However, an increase in expenses posed a headwind.
After taking into consideration certain non-recurring items, net income was $164.4 million or $8.65 per share, up from $120.1 million or $6.17 per share in the prior-year quarter.
Revenues Improve, Expenses Rise
Total revenues were $353.8 million, up 19.7% year over year. The increase was attributable to rise in all three revenue components. Also, the reported figure beat the Zacks Consensus Estimate of $351.9 million.
Operating expenses of $81.4 million rose 8.8% from the year-ago quarter. This rise was due to an increase in salaries and wages, and sales and marketing expenses.
Credit Quality: A Mixed Bag
Provision for credit losses decreased 38% year over year to $14.5 million. However, allowance for credit losses at the end of the reported quarter was $474.2 million, up from $461.9 million as of Dec 31, 2018.
Strong Balance Sheet
As of Mar 31, 2019, net loans receivable amounted to $6.1 billion, increasing from $5.8 billion as of Dec 31, 2018.
Total assets were $6.7 billion as of the same date, increasing from $6.2 billion on Dec 31, 2018. Also, total stockholders’ equity was $2 billion, up 2.9% from the end of the last reported quarter.
Our Take
Credit Acceptance is well poised for growth in revenues, given the continued rise in consumer loans. Furthermore, backed by a solid capital position, the company is expected to enhance shareholder value through continued share repurchases. However, increasing expenses might hurt bottom-line growth to some extent.
Credit Acceptance Corporation Price, Consensus and EPS Surprise
Credit Acceptance Corporation Price, Consensus and EPS Surprise | Credit Acceptance Corporation Quote
Currently, Credit Acceptance carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Finance Companies
Capital One (COF - Free Report) reported first-quarter 2019 adjusted earnings of $2.90 per share, which easily surpassed the Zacks Consensus Estimate of $2.68. Also, it compared favorably with the year-ago quarter’s adjusted earnings of $2.65.
Sallie Mae (SLM - Free Report) delivered a positive earnings surprise of 13.3% in first-quarter 2019. The company reported core earnings of 34 cents per share, surpassing the Zacks Consensus Estimate of 30 cents. Moreover, the figure rose 25.9% from the prior-year quarter.
Ally Financial Inc.’s (ALLY - Free Report) first-quarter 2019 adjusted earnings of 80 cents per share surpassed the Zacks Consensus Estimate of 79 cents. Further, the bottom line compared favorably with the prior-year quarter’s figure of 68 cents.
Is Your Investment Advisor Fumbling Your Financial Future?
See how you can more effectively safeguard your retirement with a new Special Report, “4 Warning Signs Your Investment Advisor Might Be Sabotaging Your Financial Future.”
Click to get it free >>