AmeriCredit Shares Up on Earnings
Aug. 26, 2003
NEW YORK (AP) _ Shares of auto-finance company AmeriCredit Corp. closed up 15 percent Tuesday as cutbacks helped boost the company's fourth quarter earnings.
AmeriCredit shares closed at $10, up $1.35, Tuesday on the New York Stock Exchange.
After the financial markets closed Monday, the Fort Worth, Texas, company reported a fiscal fourth-quarter loss of $17.1 million, or 11 cents a share, compared with restated earnings of $90.8 million, or $1 a share, in the same quarter the previous year.
Fourth quarter revenue fell to $197.3 million from $309.7 million last year.
But the loss included a 32 cents a share impairment charge related to assets.
Excluding items, the company had earnings of 26 cents a share. Analysts were expecting earnings, excluding items, of 21 cents a share, according to Thomson First Call.
The earnings improvement came from lower expenses following branch closures.
``Operating expenses declined to 1.9 percent of receivables as the company has reduced infrastructure by eliminating branches and is focusing on only the most profitable dealer relationships,'' Friedman Billings Ramsey analyst Todd Pitsinger said in a research note.
AmeriCredit closed 140 branches this year, leaving it with 90, as part of a plan announced in February.
The closures were related to a scaling back of the company's loan business, and loan originations went to about $750 million from $2 billion per quarter.
AmeriCredit also restated past earnings during the quarter as part of a review of its accounting procedures, a move which had been anticipated.