(Adds analyst's comments, share movement)
By Sweta Singh
BANGALORE Jan 22 U.S. auto-finance company
AmeriCredit Corp ACF.N posted a surprise quarterly loss due
to higher provision for loan losses, and cut its 2008 outlook
by nearly half, amid deteriorating conditions in the credit and
Shares of the company fell 7 percent to $9.55 in
The results seem to suggest weakening of the U.S. consumer
health and not just the impact of seasonality, Sameer Gokhale,
an analyst with Keefe Bruyette & Woods, said.
The Fort Worth, Texas-based company reported a
second-quarter loss of $19 million, or 17 cents a share,
compared with earnings of $95 million, or 74 cents a share, a
Analysts expected the company to earn 22 cents a share,
excluding items, according to Reuters Estimates.
Provision for loan losses more than doubled to $356.5
million in the quarter.
Gokhale said the increase in provision for loan losses is
partly because of the economic weakness in states such as
California and Florida, which have been hit by the U.S. housing
However, AmeriCredit's results are consistent with other
companies in the auto-finance sector, he said.
Gokhale said he sees AmeriCredit as a potential acquisition
target given that its shares are currently trading at a
discount to their book value and that the company has "pretty
clean accounting", allowing for easy integration.
AmeriCredit said it expects 2008 earnings of $1.35 to $1.55
a share, down from its prior forecast of $2.30 to $2.50 a
share. Analysts expect earnings of $1.71 a share.
AmeriCredit, which competes with Credit Acceptance Corp
(CACC.O) and Capital One Financial Corp (COF.N), has lost more
than half of its market value in the last six months.
(Reporting by Sweta Singh; Editing by Anil D'Silva, Vinu