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CACC Credit Acceptance-19.3%Stock moveEarnings and guidance

Credit Acceptance Stock Sinks 19% After Quarterly Loss and Loan Forecast Cut

The company posted a third-quarter net loss of $56.6 million after lowering its forecast of future cash flows from its loan portfolio.

By Zintick Team · Editor: Kratik Mehta
Published

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Key points

  • Credit Acceptance fell 19.3% Friday, closing at $464.89 from $575.78, as the S&P 500 ETF fell 1.77%
  • Q3 net loss of $56.6 million, or $5.43 per diluted share, versus net income of $108.2 million a year earlier
  • Forecasted net cash flows from the loan portfolio fell 2.5%, or $291.2 million, after a methodology change
  • Consumer Loan unit volume rose 37.7% to 110,010 in the quarter

Credit Acceptance Corp (Nasdaq: CACC) fell 19.3% on Friday, closing at $464.89 from a previous close of $575.78, on volume about 5.3 times its usual level. The S&P 500 ETF (SPY) fell 1.77% over the same session.

The decline followed the company's third-quarter results, which it released on Oct. 29 in a press release furnished with an 8-K. The company reported a GAAP net loss of $56.6 million, or $5.43 per diluted share, compared with net income of $108.2 million, or $9.43 per diluted share, a year earlier. Revenue rose 2% to $594.6 million.

A forecast change drove the loss

The company said the loss was primarily due to a downward adjustment to its forecasting methodology. Its forecast of future net cash flows from the loan portfolio fell 2.5%, or $291.2 million, in the quarter. The provision for credit losses on forecast changes rose to $281.9 million from $88.1 million a year earlier.

In a 10-Q filed the previous day, the company said the adjustment reduced forecasted collection rates for loans assigned from 2022 through 2026.

Volume growth was strong

Consumer Loan assignment volume rose 37.7% in units to 110,010 and 51.0% in dollars to $1.4 billion. Adjusted net income rose 14.9% to $135.5 million, or $13.01 per diluted share. Economic profit was $50.7 million.

The company ended the quarter with $1.3 million in cash and cash equivalents, alongside restricted cash and a $1.2 billion total liquidity figure it reported.

Sources

Written with AI from SEC filings and market data, and checked against those sources before publishing. Our editorial standards.

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Filings, figures and price history are on the Credit Acceptance page.