DealerTrack Earnings Cheat Sheet: Beats Wall Street’s Estimates

DealerTrack Holdings, Inc. (NASDAQ:TRAK) swung to a profit in the first quarter and beat Wall Street’s expectations in the process. DealerTrack Holdings, Inc. is a provider of on-demand software and data solutions for the automotive retail industry in the United States.

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DealerTrack Holdings Earnings Cheat Sheet for the First Quarter

Results: Swung to a profit of $24.7 million (59 cents/diluted share) in the quarter. DealerTrack Holdings, Inc. had a net loss of $2.5 million or a loss 6 cents per share in the year earlier quarter.

Revenue: Rose 35.9% to $77.2 million YoY.

Actual vs. Wall St. Expectations: TRAK reported adjusted net income of of 18 cents/share. By that measure, the company beat the mean estimate of 11 cents/share. Estimates ranged from 8 cents per share to 15 cents per share.

Quoting Management: Mark O’Neil, chairman and chief executive officer of DealerTrack, commented, “We are very pleased with our results for the first quarter as our transaction businesses benefitted from strong car sales (NYSE:TM)(NYSE:GM)(NYSE:F) and a significant improvement in the credit environment, particularly subprime lending. 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.” O’Neil continued, “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.”

Key Stats: From the fourth quarter of the last fiscal year, the company’s current liabilities rose to $56.9 million from $34.3 million.

Gross margin shrunk 1.4 percentage points to 44.5%. The contraction appeared to be driven by rising costs as the figure rose 39.6% from the year earlier quarter while revenue rose 35.9%.

Over the last five quarters, revenue has increased 13.7% on average year over year. The biggest increase came in the most recent quarter, when revenue rose 35.9% from the year earlier quarter.

Competitors to Watch: Automatic Data Processing (NASDAQ:ADP), Openwave Systems Inc. (NASDAQ:OPWV), Equifax Inc. (NYSE:EFX), ModusLink Global Solutions, Inc. (NASDAQ:MLNK), Solera Holdings, Inc. (NYSE:SLH) and Keynote Systems, Inc. (NASDAQ:KEYN).

Stock Performance: Shares of TRAK closed up 2.4% at $21.31 per share from the previous close.

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