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Credit Acceptance (CACC) Q1 Earnings Beat, Provisions Down Y/Y
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Credit Acceptance Corporation’s (CACC - Free Report) first-quarter 2021 earnings of $11.82 per share comfortably outpaced the Zacks Consensus Estimate of $8.44. In the prior-year quarter, the company registered a net loss of $4.61 per share. These figures include certain non-recurring items.
Results were primarily aided by an increase in revenues and substantially lower provisions. Also, the company recorded an increase in loans in the quarter. However, higher expenses were the undermining factor.
Excluding non-recurring items, net income (non-GAAP basis) was $164.8 million or $9.64 per share, down from $175.7 million or $9.66 per share in the prior-year quarter.
GAAP Revenues Improve, Expenses Rise
Total revenues were $451 million, up 15.9% year over year. The increase was driven by a rise in finance charges and premiums earned. Moreover, the figure beat the Zacks Consensus Estimate of $427.9 million.
Provision for credit losses was $21.3 million, down 94% from $354.7 million in the year-ago quarter.
Operating expenses of $112.6 million rose 42.4% year over year. A significant rise in general and administrative costs resulted in the increase.
As of Mar 31, 2021, net loans receivable amounted to $6.9 billion, up from $6.8 billion recorded at the end of December 2020. Total assets were $7.7 billion as of the same date, up from $7.5 billion as of Dec 31, 2020. Total stockholders’ equity was $2.4 billion, up 2.9% from December 2020 end.
Our Take
Credit Acceptance remains well-poised for revenue growth, given the gradual increase in the demand for consumer loans. However, elevated expenses pose a major headwind.
Credit Acceptance Corporation Price, Consensus and EPS Surprise
Main Street Capital Corporation (MAIN - Free Report) and FS KKR Capital Corp. (FSK - Free Report) are scheduled to announce quarterly results on May 6 and May 10, respectively. Gladstone Investment Corporation (GAIN - Free Report) is scheduled to announce the March-end quarter’s results on May 11.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Credit Acceptance (CACC) Q1 Earnings Beat, Provisions Down Y/Y
Credit Acceptance Corporation’s (CACC - Free Report) first-quarter 2021 earnings of $11.82 per share comfortably outpaced the Zacks Consensus Estimate of $8.44. In the prior-year quarter, the company registered a net loss of $4.61 per share. These figures include certain non-recurring items.
Results were primarily aided by an increase in revenues and substantially lower provisions. Also, the company recorded an increase in loans in the quarter. However, higher expenses were the undermining factor.
Excluding non-recurring items, net income (non-GAAP basis) was $164.8 million or $9.64 per share, down from $175.7 million or $9.66 per share in the prior-year quarter.
GAAP Revenues Improve, Expenses Rise
Total revenues were $451 million, up 15.9% year over year. The increase was driven by a rise in finance charges and premiums earned. Moreover, the figure beat the Zacks Consensus Estimate of $427.9 million.
Provision for credit losses was $21.3 million, down 94% from $354.7 million in the year-ago quarter.
Operating expenses of $112.6 million rose 42.4% year over year. A significant rise in general and administrative costs resulted in the increase.
As of Mar 31, 2021, net loans receivable amounted to $6.9 billion, up from $6.8 billion recorded at the end of December 2020. Total assets were $7.7 billion as of the same date, up from $7.5 billion as of Dec 31, 2020. Total stockholders’ equity was $2.4 billion, up 2.9% from December 2020 end.
Our Take
Credit Acceptance remains well-poised for revenue growth, given the gradual increase in the demand for consumer loans. However, elevated expenses pose a major headwind.
Credit Acceptance Corporation Price, Consensus and EPS Surprise
Credit Acceptance Corporation price-consensus-eps-surprise-chart | Credit Acceptance Corporation Quote
Currently, Credit Acceptance carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release Dates of Other Finance Companies
Main Street Capital Corporation (MAIN - Free Report) and FS KKR Capital Corp. (FSK - Free Report) are scheduled to announce quarterly results on May 6 and May 10, respectively. Gladstone Investment Corporation (GAIN - Free Report) is scheduled to announce the March-end quarter’s results on May 11.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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