Credit Acceptance-CACC Stock Jumps 5.8% as Q4 Earnings Beat on Higher Finance Charges

Core Viewpoint - Credit Acceptance Corporation (CACC) reported better-than-expected fourth-quarter 2024 results, with significant earnings growth and revenue increase, despite rising operating expenses [1][4]. Financial Performance - Earnings per share for Q4 2024 were $12.26, exceeding the Zacks Consensus Estimate of$ 6.82, marking a 68.2% year-over-year increase [1]. - For the full year 2024, earnings per share were $19.88, surpassing the consensus estimate of$ 14.47 but reflecting a 9.6% decline from the previous year [3]. - Adjusted net income for Q4 2024 was $126 million or$ 10.17 per share, slightly down from $129.1 million or$ 10.06 per share in the prior-year quarter [2]. Revenue and Expenses - Total GAAP revenues for Q4 2024 were $565.9 million, a 15.1% increase year over year, beating the consensus estimate of$ 562.4 million [4]. - For the full year 2024, total GAAP revenues reached $2.16 billion, up 13.7% from the prior year, meeting the consensus estimate [4]. - Operating expenses increased by 6.4% to$ 121.6 million [5]. Loan and Asset Growth - Net loans receivables as of December 31, 2024, were $7.85 billion, a 12.9% increase from December 2023 [5]. - Total assets grew to$ 8.85 billion as of December 31, 2024, up from $7.61 billion a year earlier [5]. - Total shareholders' equity remained stable at$ 1.75 billion [5]. Industry Context - Credit Acceptance is positioned for revenue growth due to increasing demand for consumer loans, despite challenges from rising expenses and potential asset quality issues [6]. - Peer performance highlights include Capital One's adjusted earnings of $3.09 per share, surpassing estimates, and Ally Financial's adjusted earnings of 78 cents per share, reflecting a 95% year-over-year increase [7][8].