Americredit Beats Targets

The company offers guidance reflecting the Bay View deal.
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AmeriCredit

(ACF)

rose 5% late Monday after posting a 15% profit gain for its third quarter.

The Fort Worth, Texas, subprime lender made $87 million, or 60 cents a share, for the quarter ended March 31, up from the year-ago $76 million, or 46 cents a share. Analysts surveyed by Thomson Financial were looking for a 53-cent profit.

The company also offered guidance for the fiscal year ending next June, saying it targets earnings of $2.10 to $2.30 a share. Analysts were looking for $2.36, though AmeriCredit said its target reflects the results of Bay View Acceptance, whose net interest margin and credit losses are historically lower than AmeriCredit's. AmeriCredit expects to close the Bay View purchase by June 30.

"Our March results reflected strength in our key performance metrics -- net income increased 15% from a year ago, credit results were better than expected, and origination volume was strong," said CEO Dan Berce. "These positive results have further strengthened our balance sheet providing the ability to continue our share repurchase program as well as support our growth initiatives for fiscal year 2007 and beyond."

Automobile loan purchases rose to $1.61 billion from $1.37 billion in the March 2005 quarter. Annualized net charge-offs totaled 5.2% of average managed auto receivables for the March 2006 quarter, compared to 5.4% for the March 2005 quarter. Managed auto receivables 31-to-60 days delinquent were 4.7% of the portfolio at March 31, compared to 4.9% a year ago. Accounts more than 60 days delinquent were 1.6% of the portfolio at March 31, compared to 1.8% a year earlier.

Late Monday, shares of AmeriCredit rose $1.50 to $33.20.