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AmeriCredit Reports Second Quarter Operating Results

AmeriCredit Corp. has announced net income of $95 million, or $0.74 per share, for its fiscal second quarter ended December 31, 2006. AmeriCredit reported net income of $87 million, or $0.59 per share, for the same period a year earlier.

by Staff
January 25, 2007
3 min to read


Fort Worth, Texas — AmeriCredit Corp. has announced net income of $95 million, or $0.74 per share, for its fiscal second quarter ended December 31, 2006. AmeriCredit reported net income of $87 million, or $0.59 per share, for the same period a year earlier. For the six months ended December 31, 2006, AmeriCredit reported net income of $170 million, or $1.27 per share, versus earnings of $141 million, or $0.93 per share, for the six months ended December 31, 2005.


Net income for the three and six months ended December 31, 2006, included a $23 million after-tax gain ($36 million pre-tax), or $0.18 per share and $0.17 per share, respectively, related to the partial sale of AmeriCredit's investment in DealerTrack Holdings, Inc. Net income for all periods ended December 31, 2005, included a $6 million after-tax gain ($9 million pre-tax), or $0.04 per share, related to the partial sale of AmeriCredit's investment in DealerTrack Holdings, Inc.

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Automobile loan purchases increased to $1.74 billion for the second quarter of fiscal year 2007, compared to $1.34 billion for the same period last year. Loan purchases for the six months ended December 31, 2006, were $3.42 billion compared to $2.86 billion for the same period a year earlier. Managed receivables totaled $12.58 billion at December 31, 2006, compared to $11.00 billion at December 31, 2005.


Annualized net charge-offs totaled 5.8 percent of average managed receivables for the December 2006 quarter compared to 5.9 percent for the December 2005 quarter. For the six months ended December 31, 2006, annualized net charge-offs were 5.6 percent compared to 5.8 percent for the same period last year.


Managed auto receivables 31-to-60 days delinquent were 6.7 percent of the portfolio at December 31, 2006, compared to 6.5 percent at December 31, 2005. Accounts more than 60 days delinquent were 2.6 percent of the portfolio at December 31, 2006, compared to 2.8 percent at December 31, 2005.

Pursuant to Regulation FD, the Company provides its expectations regarding future business trends to the public via a press release or 8-K filing. The Company anticipates some risks and uncertainties with its business.


The following net income and earnings per share forecasts have been updated from guidance provided on October 24, 2006, to reflect the impact of the acquisition of Long Beach Acceptance Corp. on January 1, 2007, and a pre-tax gain of $16 million on the sale of the Company's remaining investment in DealerTrack Holdings, Inc., in January 2007.

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During the revised fiscal year ending June 30, 2007, net income forecast (in millions) is $337-$367. Earnings per share are forecasted at $2.54-$2.74. During the previous fiscal year ending June 30, 2007, net income forecast is $325-$355. Earnings per share are forecasted at $2.45-$2.65.



The forecasts for fiscal year 2007 incorporate, but are not limited to, the following assumptions, which include Long Beach:


-New loan origination volume of $7.8 to $8.4 billion;


-Net interest margin of 11.6 percent to 12.6 percent of average receivables;


-Operating expenses of 2.8 percent to 3.2 percent of the portfolio;

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-Credit losses to average between 4.3 percent and 5.3 percent overall for the fiscal year, but varying seasonally by quarter; and


-Annualized provision for loan losses as a percent of average receivables to range between 4.8 percent and 5.8 percent.



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