Revved-up U.S. auto sales fuel DealerTrack's revenue
DealerTrack Technologies Inc., a Lake Success company that makes software for auto dealers, said Monday that second-quarter sales rose sharply as car sales have roared back.
The company's revenue jumped to $121.8 million during the three months ending in June, up 26 percent from the same period last year as nationwide sales of pickup trucks, sport utility vehicles and other automobiles continue to rebound from the recession.
"The macro environment is very healthy. When you look at auto sales, credit trends, dealership profitability . . . it is a great macro environment," DealerTrack chairman and chief executive Mark F. O'Neil said during a call with analysts.
Despite the jump in sales, the company's second-quarter profit was down 35 percent from 2012, to $3.8 million or 9 cents per share. That's largely because DealerTrack's bottom line received a $3.5 million boost last year from the sale of assets from a joint venture.
DealerTrack's revenue is based partly on the number of times auto dealers use its software to submit credit applications, process motor vehicle registrations and perform a variety of other functions. So the company's earnings tend to rise or fall on recent car sales.
Consequently, DealerTrack has prospered over the last few months as more available credit, new products and pent-up post-recession demand have driven up sales. June was a particularly strong month for car dealers as seasonally adjusted monthly sales hit an annualized rate of nearly 16 million -- their highest level since 2007.
DealerTrack's nearly $122 million in second-quarter sales beat the expectation of analysts who had forecast revenue of $114.5 million, according to data compiled by Bloomberg.
Shares of DealerTrack fell 43 cents to $37.33 ahead of the earnings report, which was issued after the stock market closed.
DealerTrack stock market value is roughly $1.62 billion. It employs 1,800 people, including about 300 on Long Island.