DealerTrack Technologies (TRAK) Up After Exceeding Expectations
Founded in 2001, DealerTrack operates as a holding company, and it's primary business is providing web-based software solutions and services providing enhanced efficiency and profitability for all major segments of the retail auto industry.
Shares of Lake Success, New York, based DealerTrack Technologies Inc. (TRAK) rose on Tuesday on a day when the markets were down marginally across the board. DealerTrack's stock was up 18.73%, rising $7.32 per share, to close at $46.40. Trading volume was 2,616,637, versus average trading volume of 517,176 shares. The Company reported second quarter results that exceeded analysts expectations, and forward guidance that offered improved results for the balance of the year.
The stock rose on Tuesday after the company announced that it's second quarter earning were higher than analysts expectations. Earnings for the second quarter came in at $.41 per share, versus $.37 for the same period a year ago. More significantly, revenues increased to $224.8 million, up from $121.8 during the second quarter of 2013. This represents an 85% increase in revenue in just one year. Analysts had been expecting earnings to come in at $.37 per share, and total revenues of $213.45 million.
The company also offered improved earnings and revenue guidance for the balance of the year. Earnings are now projected to come in in the range of $1.47 to $1.56 per share, compared to previous forward guidance of $1.42 to $1.53. Revenue guidance now comes in at $829 million to $843 million, compared to earlier guidance that had total sales falling between $814 million and $826 million. The consensus estimate by analysts calls for earnings of $1.48 per share, and total revenues of $819 million.
"We reported a strong second quarter financially as we continue on our journey to transform automotive retailing for our dealer clients," said DealerTrack Chairman and Chief Executive Officer Mark F. O'Neil. "We completed the first full quarter with Dealer.com in our results, and we are particularly excited about the contributions that new subscription and advertising solutions are having on our overall growth and revenue visibility. We achieved organic growth of 21 percent for the second quarter in a row. As a result, we are increasing our full year revenue and profitability guidance to reflect our strong performance in the second quarter and growing confidence that our vision to deliver a suite of integrated technologies capable of transforming automotive retailing is resonating with our clients."
The company did caution that the improved forward guidance could be affected by factors beyond its control, including economic trends that affect the automotive retail industry or the indirect automotive financing industry including the number of new and used cars sold; credit availability; reductions in automotive dealerships and increased competitive pressure from other industry participants.
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