Dealertrack shares fall sharply after earnings report
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Shares of Dealertrack Technologies Inc. fell Tuesday after the Long Island software maker reported lower than expected first-quarter profits.
Dealertrack stock closed at $41.02, down 7.57 percent. A representative of the company declined to comment.
Late Monday, the Lake Success company reported an $11.6 million loss for the three months ending in March, with diluted adjusted net income of 23 cents per share.
Analysts, however, had expected 28 cents per share. The company also reported lower-than-expected revenue from subscriptions.
Despite the dip in profits, Dealertrack's overall first-quarter revenue rose to $158.8 million, up 46 percent from the same period last year. The company is expecting sales to nearly double this year, to between $814 million and $826 million.
Dealertrack's rise has attracted investors who seek quick profits from fast-growing software-as-a-service companies. The drop in Dealertrack's share price Tuesday appears to stem, in part, from some of those investors' pulling out because the company's quarterly earnings fell short of expectations, said Gary Prestopino, an analyst who follows Dealertrack for Barrington Research in Chicago.
Dealertrack, the Island's 11th largest company by stock market value, sells software that auto dealers use to submit credit applications, process motor vehicle registrations and perform various other functions.