DealerTrack Holdings Earnings: Here’s Why Investors are Ambivalent Now

DealerTrack Holdings, Inc. (NASDAQ:TRAK) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company.

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DealerTrack Holdings, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 22.73% to $0.27 in the quarter versus EPS of $0.22 in the year-earlier quarter.

Revenue: Rose 19.08% to $109.1 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: DealerTrack Holdings, Inc. reported adjusted EPS income of $0.27 per share. By that measure, the company beat the mean analyst estimate of $0.25. It beat the average revenue estimate of $106.57 million.

Quoting Management: Mark F. O’Neil, chairman and chief executive officer of Dealertrack Technologies, Inc., commented, “We are off to a solid start for the year. Our focus on selling broader solutions to dealerships helped drive an increase in momentum for our subscription products in the first quarter, led by our dealer management system. At the same time, transaction revenue continues to increase faster than the growth in car sales as we derived more revenue per car sold through increased cross-selling. We are also making significant progress in a number of product initiatives that we believe will help us deliver strong growth and profitability in the years ahead.”

Key Stats (on next page)…

Revenue increased 7.19% from $101.78 million in the previous quarter. EPS decreased 12.9% from $0.31 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.36 to a profit $0.32. For the current year, the average estimate has moved down from a profit of $1.31 to a profit of $1.23 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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