Credit Acceptance Corp

F:2D5

Earnings: Credit Acceptance reported GAAP net income of $12.66 per diluted share, up 71% year over year, and adjusted net income of $12.12 per diluted share, up 21%.

Volume: Loan unit volume declined 1% year over year, but monthly volume returned to growth in June and stayed positive in July, suggesting improvement is starting to show up in the business.

Credit: Forecasted net cash flows declined $39.1 million, or 0.3%, which management said was modest relative to roughly $12 billion of forecast cash flows and consistent with expectations.

Strategy: Management said its pricing, segmentation, and operating changes are gaining traction, with a stronger focus on profitable growth rather than volume at any cost.

Dealer Base: The company added over 1,400 new dealers and ended the quarter with over 11,000 active dealers, its second straight record quarter for active dealers.

Outlook: Management said prepayments remain slower than expected, but they do not see anything meaningful in the portfolio that would change the current forecast yet.