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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.
Revenue by Segment
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.
Revenue & Expenses
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Historical Earnings Impact
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Avg. Return Before/After Earnings
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