Loading...
•
Mar 31, 2022
Credit Acceptance Q1 2022 Earnings Report
Announced first quarter 2022 results, with net income of $214.3 million and EPS of $14.94.
Key Takeaways
Credit Acceptance Corporation reported a consolidated net income of $214.3 million, or $14.94 per diluted share, for the three months ended March 31, 2022, compared to $202.1 million, or $11.82 per diluted share, for the same period in 2021. The results were influenced by increased forecasted collection rates, high profitability per consumer loan, and a decline in consumer loan assignment volume.
Forecasted collection rates increased for consumer loans assigned in 2016, 2017, and 2019 through 2021, increasing forecasted net cash flows by $110.2 million.
Forecasted profitability per consumer loan assignment significantly exceeded initial estimates for loans assigned in 2018 through 2021.
Consumer loan assignment volume decreased, with unit and dollar volumes declining 22.1% and 10.5%, respectively, compared to Q1 2021.
Approximately 802,000 shares were repurchased, representing 5.7% of the shares outstanding at the beginning of the quarter.
Credit Acceptance
Credit Acceptance
Credit Acceptance Revenue by Segment
Revenue by Segment
Finance Charges Revenue
CapyFin.comPremiums Earned Revenue
CapyFin.comOther Income Revenue
CapyFin.com Forward Guidance
Unit volume for April 2022 declined 13.8% compared to April 2021, but the year-over-year change in unit volume improved significantly throughout the month. Should recent trends continue for the remainder of 2022, the year-over-year change in unit volume would improve from April 2022.
Positive Outlook
- Significant improvement in year-over-year unit volume change throughout April 2022.
- Potential for continued improvement in unit volume trends throughout the remainder of 2022.
- Anticipated improvement in year-over-year unit volume change compared to the significant decline in 2021.
- Increase in the average advance paid per unit due to increases in both the average size of consumer loans and the average advance rate.
- Focus on maximizing economic profit within capital and infrastructure constraints.
Challenges Ahead
- Unit volume for April 2022 declined 13.8% compared to April 2021.
- Decline in consumer loan assignment volume, with unit and dollar volumes down 22.1% and 10.5%, respectively, in Q1 2022.
- Decline in the number of active dealers by 9.4% and a 14.6% decrease in the average unit volume per active dealer.
- Belief that low dealer inventories and elevated used vehicle prices are due to supply chain disruptions in the automotive industry.
- Impact of the distribution of federal stimulus payments in the first four months of 2021 affecting unit volume comparisons.
Revenue & Expenses
Visualization of income flow from segment revenue to net income