Credit Acceptance Corp. (NASDAQ:CACC) stock fell 4.56% (As on Feb 1, 12:03:14 AM UTC-4, Source: Google Finance) though the company posted better than expected results for the fourth quarter of FY 21. The company reported adjusted net income, for the three months ended December 31, 2021 was $212.6 million, compared to $189.5 million for the same period in 2020. Unit and dollar volumes declined 22.6% and 12.7%, respectively, during the fourth quarter of 2021 as the number of active dealers declined 11.5% and the average unit volume per active dealer declined 13.2%. Dollar volume declined less than unit volume during the fourth quarter of 2021 due to an increase in the average advance paid per unit. This increase was the result of an increase in the average size of the Consumer Loans assigned, primarily due to an increase in the average vehicle selling price.

CACC in the fourth quarter of FY 21 has reported the adjusted earnings per share of $14.60, beating the analysts’ estimates for the adjusted earnings per share of $12.72, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue of $463.2 million in the fourth quarter of FY 21, beating the analysts’ estimates for revenue by 1.09%.

Moreover, the increase in economic profit for the year ended December 31, 2021, as compared to the same period in 2020, was primarily the result of an increase in the adjusted return on capital of 170 basis points, primarily due to an increase in the yield used to recognize adjusted finance charges on our loan portfolio increased the adjusted return on capital by 230 basis points, primarily due to an improvement in Consumer Loan performance. Faster growth in operating expenses decreased the adjusted return on capital by 60 basis points as operating expenses grew by 17.8% while adjusted average capital remained constant. An increase in the cost of capital of 20 basis points, primarily due to an increase in the 30-year Treasury rate, which is used in the average cost of equity calculation, partially offset by a decline in the average cost of debt

Meanwhile, on January 22, 2014, the company issued the 2021 senior notes. On February 21, 2014, the company used the net proceeds from the 2021 senior notes, together with borrowings under the revolving credit facilities, to redeem in full the $350.0 million outstanding principal amount of the 9.125% senior notes due 2017.