Wednesday, automobile finance company AmeriCredit Corp. (ACF) reported a profit for the second quarter, compared with a loss a year-ago, attributable to lower provision for loans losses and a significant decline in expenses.
According to the Fort Worth, Texas-based company, net income for the second quarter was $46.02 million or $0.33 per share, compared with a loss of $35.00 million or $0.29 per share in the year-ago period.
On average, eight analysts polled by Thomson Reuters expected the company to earn $0.08 per share. Analysts' estimates typically exclude special items.
Second quarter revenue declined to $386.75 million from $558.59 million in the prior year period. Five Wall Street analysts estimated revenues of $388.85 million for the quarter.
The company said that net loss for the quarter and six months ended December 31, 2008, were revised, from a net loss of $26 million or $0.21 per share and $27 million or $0.23 per share, respectively, to reflect the retrospective adoption, on July 1, 2009, of a new accounting standard that changes the accounting for convertible bonds.
AmeriCredit's originations for the quarter were $379 million, compared to $321 million for the same quarter last fiscal year.
Annualized net charge-offs for the quarter were 8.9% of average finance receivables, compared with 9.5% for the prior year quarter. The allowance for loan losses as a percentage of finance receivables was 7.7% at December 31, 2009, compared with 7.1% at December 31, 2008.
"We had an outstanding December quarter with year-over-year improvements in all key aspects of our business - originations, credit performance and earnings," said President and Chief Executive Officer Dan Berce. "While we remain cautious about the economic recovery, our strong balance sheet and improving credit trends combined with a more favorable capital markets environment, position us well to move forward and continue to rebuild our business in 2010," he added.
Segment-wise, revenue from Finance charge income declined to $363.1 million from $497.56 million a year-ago, while other income declined to $23.65 million from $30.62 million in the year-ago period. Also, a one-time item in the form of a gain on retirement of debt of $30.41 million added to the revenue in the year-ago period.
According to the company, total costs and expenses during the quarter declined to $314.54 million from $611.40 million a year-ago. Operating expenses declined to $76.41 million from $84.34 million a year-ago and leased vehicles expenses declined to $10.22 million from $12.15 million a year-ago. Provision for loan losses declined to $106.19 million from $288.02 million in the prior year period. Interest expenses declined significantly to $121.76 million from $224.77 million in the year ago period.
On November 16, 2009, market rival Consumer Portfolio Services Inc. reported a narrower net loss for its third quarter.
For the six months, AmeriCredit reported net income of $71.79 million or $0.52 per share, compared with net loss of $40.27 million or $0.34 per share a year-ago. Year-to-date revenue declined to $800.03 million from $1.124 billion a year-ago.
ACF closed Wednesday's last trade on the New York Stock Exchange at $21.30, up $0.36 or 1.72%, on a volume of 1.14 million shares on the New York Stock Exchange. In the after hours, the stock further traded up $0.01 or 0.05%.
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