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Jun 30, 2021
Credit Acceptance Q2 2021 Earnings Report
Credit Acceptance reported strong Q2 results driven by improved loan performance and effective cost management.
Key Takeaways
Credit Acceptance Corporation announced consolidated net income of $288.6 million, or $17.18 per diluted share, for the three months ended June 30, 2021, compared to $96.4 million, or $5.40 per diluted share, for the same period in 2020. The results were driven by an increase in forecasted collection rates, impacting net cash flows positively, and a decrease in operating expenses.
Forecasted collection rates for Consumer Loans assigned in 2017 through 2021 increased, boosting forecasted net cash flows by $104.5 million.
Profitability per Consumer Loan assignment was consistent with initial estimates for 2021 assignments and exceeded estimates for 2018-2020 assignments.
Consumer Loan assignment volume declined, with unit and dollar volumes decreasing by 28.7% and 20.5%, respectively.
The company repurchased approximately 598,000 shares, representing 3.6% 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
The company did not provide specific forward guidance but noted the ongoing impact of the COVID-19 pandemic on their business, particularly related to dealer inventories and used vehicle prices.
Positive Outlook
- Continued focus on maximizing economic profit within capital and infrastructure constraints.
- Expectations of long-term value creation through strategic investments.
- Commitment to improving credit scores for consumers.
- Adaptation to market changes and economic conditions.
- Aiming to provide opportunity to improve lives.
Challenges Ahead
- Ongoing impact of COVID-19 pandemic on business operations.
- Decline in consumer loan assignment volume.
- Low dealer inventories and increasing used vehicle prices.
- Potential challenges in accurately forecasting future collections.
- Dependence on external economic conditions and market factors.
Revenue & Expenses
Visualization of income flow from segment revenue to net income