AmeriCredit Corp (ACF) easily surpassed expectations in its latest earnings report, which has sent shares soaring.
Company Description
AmeriCredit Corp. provides auto financing through dealerships in the U.S. Currently, ACF has about $9 billion in receivables from 800,000 customers.
Another Huge Surprise
AmeriCredit reported second-quarter results on Jan 27 that showed an 18% increase in originations, to $379 million. Net income came in at $46 million, which breaks down to 22 cents per shares, more than 3 times the 8 cent consensus. AmeriCredit has topped expectations for the fifth time in a row, with the last 4 averaging a 258% surprise.
Bullish Outlook
Dan Berce, President and Chief Executive Officer, said “While we remain cautious about the economic recovery, our strong balance sheet and improving credit trends combined with a more favorable capital markets environment, position us well to move forward and continue to rebuild our business in 2010.”
Estimates Jump
Following the quarterly report, AmeriCredit analysts drastically increased their earnings projections. The Zacks Consensus Estimate for fiscal 2010 is now $1.04, up from 72 cents.
Projections for the next fiscal year are averaging $1.09, up from 92 cents. If these levels are met, year over year growth rates will be 514% and 4%, respectively.
The Chart
Shares of ACF could break through this level of resistance as momentum builds following the earnings surprise. Take a look at the chart below.
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