DealerTrack’s First Quarter Profit Increase Driven by Improving Market Conditions
LAKE SUCCESS — Strong car sales and an improving credit environment led to a first quarter revenue increase for DealerTrack Holdings Inc., company officials reported today.
Revenue increased to $77.2 million from $56.9 million in the year ago quarter. The company’s net profit for the quarter stood at $24.7 million, a turnaround from the $2.5 million net loss it reported a year ago.
“We are very pleased with our results for the first quarter as our transaction business benefited from strong car sales and a significant improvement in the credit environment, particularly subprime lending,” Mark O’Neil, chairman and CEO of DealerTrack, stated in a company press release. “In addition, the momentum in our subscription business is very strong, as dealers are feeling more confident and increasingly willing to invest in solutions that will improve their operations.”
Adjusted earnings before interest, taxes, depreciation and amortization stood at $12.9 million for the quarter, up from $4.9 million in the year-ago period. Adjusted net income was $7.5 million, up from $2.1 million in the first quarter last year.
Based on its first quarter results, the company raised its revenue and earnings outlook for 2011. Revenue, officials said, should end the year between $324 million and $330 million. The company’s initial estimate for full-year revenue was between $316 million and $324 million.
Company officials also raised net income estimates from between $2.9 million and $5.4 million to a range of $24 million and $26.5 million.
The new estimates, officials said, assume that new- and used-car sales will end the year at approximately 12.8 million and 13 million units, respectively.
“Today’s results illustrate the leverage in our business model, which, if car sales and credit availability continue to improve, will enable us to continue to deliver strong results,” O’Neil said.
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