Shares of Credit Acceptance Corp. (CACC) plummeted 8.79% on Wednesday after the company reported its third-quarter 2024 financial results. While revenue rose from the previous year, the earnings figures fell short of Wall Street's expectations, triggering a sell-off in the stock.
The subprime auto lender reported Q3 revenue of $480.6 million, up 8.2% year-over-year. However, net income declined to $144.9 million, or $10.77 per diluted share, missing analysts' estimates of $11.20 per share. The company cited higher loan loss provisions and operating expenses as factors that weighed on profitability.
Credit Acceptance's CEO Brett Roberts acknowledged the challenges faced during the quarter, stating, "While we continued to see strong demand for our lending services, the macroeconomic environment remains uncertain, impacting credit performance and operating costs." Investors reacted negatively to the weaker-than-expected earnings, leading to the sharp decline in the stock price.
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