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Credit Acceptance (CACC) Q4 Earnings Beat, Revenues & Costs Up

·3 min read

Credit Acceptance Corporation’s CACC fourth-quarter 2021 earnings of $14.60 per share comfortably surpassed the Zacks Consensus Estimate of $12.72. The bottom line reflects a 54.8% increase from the prior-year quarter. These figures include certain non-recurring items.

Results were primarily aided by an increase in revenues and lower provisions. However, higher expenses hurt results to some extent.

Excluding non-recurring items, net income (non-GAAP basis) was $212.6 million or $14.26 per share, up from $189.5 million or $10.75 per share in the prior-year quarter.

In 2021, earnings per share of $59.52 surpassed the Zacks Consensus Estimate of $57.13. The bottom line represents a significant rise from the previous year. Excluding non-recurring items, net income (non-GAAP basis) was $826.8 million or $51.35 per share, up from $686.3 million or $38.26 per share in 2020.

GAAP Revenues Improve, Expenses Rise

Total quarterly revenues were $463.2 million, up 3.5% year over year. The increase was mainly driven by a rise in finance charges and other income. The top line also beat the Zacks Consensus Estimate of $458.2 million.

For 2021, revenues were $1.86 billion, up 11.2% year over year. The top line surpassed the Zacks Consensus Estimate of $1.85 billion.

In the reported quarter, provision for credit losses was $25.9 million, down from $92.6 million in the year-ago quarter.

Operating expenses of $104.5 million rose 23.7% year over year. An increase in salaries and wages, along with higher sales and marketing costs, led to the rise.

As of Dec 31, 2021, net loans receivable were $6.34 billion, down 6.7% from the December-2020 level. Total assets were $7.05 billion as of the same date, down from $7.49 billion as of Dec 31, 2020. Total stockholders’ equity was $1.82 billion, down 20.8%.

Share Repurchase Update

During the quarter, Credit Acceptance repurchased 0.6 million shares.

Our Take

Credit Acceptance remains well-poised for revenue growth, given the gradual increase in demand for consumer loans. However, elevated expenses pose a major headwind.

Credit Acceptance Corporation Price, Consensus and EPS Surprise

Credit Acceptance Corporation Price, Consensus and EPS Surprise
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.

Performance of Other Consumer Loan Providers

Ally Financial’s ALLY fourth-quarter 2021 adjusted earnings of $2.02 per share surpassed the Zacks Consensus Estimate by a penny. The bottom line showed a rise of 26.3% from the year-ago quarter’s number. ALLY’s net income (on a GAAP basis) was $624 million or $1.79 per share, down from $687 million or $1.82 per share in the prior-year quarter.

Results benefited primarily from an improvement in revenues, and higher loans and deposit balances. However, a rise in expenses and higher provisions hurt Ally Financial’s results to some extent.

Capital One’s COF fourth-quarter 2021 earnings of $5.41 per share easily surpassed the Zacks Consensus Estimate of $5.14. The bottom line improved 2% from the year-ago quarter’s adjusted number. COF’s net income available to common shareholders (GAAP basis) was $2.3 billion, down 7% from the prior-year quarter.

Capital One’s results benefited from a solid rise in loan balances, which supported net interest income and margin. Higher consumer confidence aided credit card business and non-interest income. However, an increase in operating expenses was a headwind.


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