AmeriCredit announced a 63-percent decline in quarterly profits last week, but the news wasn’t all that bad.
In fact, the tumble in profits beat predictions by analysts, sending the Fort Worth, Texas-based lender’s shares to rise 4.6 percent on the New York Stock Exchange the same day it released its quarterly results.
Reflecting late payments from borrowers, AmeriCredit’s third-quarter net income was $38.2 million, or 31 cents a share, compared with $103.7 million, or 80 cents a share, a year ago. Analysts polled by Thomson Financial expected per-share profit of 21 cents, the Associated Press reported.
AmeriCredit officials said they expect the company to be profitable this year, but added that the company would no longer offer future earnings estimates because of the of the credit crunch and the weakening economy.
The lender issued $1.33 billion in loans during the quarter, and its revenue grew 4 percent.
Company officials said the company is aiming to pull back its operations as it deals with rising defaults and deterioration in the credit markets.
AmeriCredit now plans to originate about $3 billion in loans in 2008, down from its previous forecast of $6.5 billion to $7 billion. Officials said the reduction will come through a combination of credit tightening and dealer and geographic selectivity.