DealerTrack Holdings Inc. Earnings Cheat Sheet: Exceeds Forecasts with Boost of Profit Rise

DealerTrack Holdings, Inc. (NASDAQ:TRAK) reported net income above Wall Street’s expectations for the third quarter. DealerTrack Holdings 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 Third Quarter

Results: Net income for DealerTrack Holdings, Inc. rose to $5.4 million (13 cents per share) vs. $1.2 million (3 cents per share) in the same quarter a year earlier. This is a more than fourfold rise from the year earlier quarter.

Revenue: Rose 51.8% to $95.8 million from the year earlier quarter.

Actual vs. Wall St. Expectations: TRAK reported adjusted net income of 34 cents per share. By that measure, the company beat the mean estimate of 18 cents per share. It beat the average revenue estimate of $88.5 million.

Quoting Management: Mark O’Neil, chairman and chief executive officer of DealerTrack, commented, “We are very pleased with our record revenue and non-GAAP earnings results for the third quarter as our transaction businesses continue to benefit from the improvement in auto credit availability, an increase in car sales year over year, the addition of new lenders to our network, and the performance of DealerTrack Processing Solutions. Additionally, our subscription business benefitted from our recent eCarlist acquisition.”

Key Stats:

Revenue has risen the past four quarters. Revenue increased 43.8% to $89.1 million in the second quarter. The figure rose 35.9% in the first quarter from the year earlier and climbed 16.4% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company has now topped analyst estimates for the last three quarters. It beat the mark by 2 cents in the second quarter and by 18 cents in the first quarter.

Looking Forward: Over the past ninety days, the average estimate for the fourth quarter has fallen from 16 cents per share to 15 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. For the fiscal year, the average estimate has moved up from 63 cents a share to 69 cents over the last ninety days.

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

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

 

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