CDK Global Inc.'s fiscal first-quarter net profit dipped on largely flat revenue, though company executives said the quarter beat expectations amid the coronavirus pandemic.
The Hoffman Estates, Ill., dealership management system giant reported Monday that net earnings attributable to CDK were $55.7 million in the quarter that ended Sept. 30, down 32 percent from $82 million in the year-earlier quarter. Revenue was nearly flat at $493.6 million, compared with $494.6 million a year ago, but up nearly 10 percent from $449.6 million in the fiscal fourth quarter that ended June 30.
The company recorded restructuring expenses of $8.7 million and a $12 million litigation provision in the quarter that were not reported in the year-earlier period. CDK said adjusted earnings before interest, taxes, depreciation, and amortization were $195.2 million in the latest quarter, up 3.7 percent from the same quarter a year earlier.
CDK CEO Brian Krzanich said in a statement that the number of North American automotive customer sites has grown year over year for seven consecutive quarters.
Total DMS customer sites in North America, including automotive and adjacent markets such as trucking and recreation vehicles, numbered 14,770 as of Sept. 30, 38 more than in the same quarter a year ago.
North American automotive DMS customer sites totaled 8,966 as of Sept. 30, an increase of nine from a year ago.
Krzanich told analysts Monday on a quarterly earnings call that CDK's first-quarter results are an "amazing accomplishment" given an ongoing accounting impact from discounted dealership fees offered this past spring to offset the effects of the pandemic.
"We're very pleased with the healthy growth of the core business," Krzanich told analysts.
CDK's stock was unchanged at $44.03 in after-hours trading Monday.
CFO Joe Tautges said in a statement that the company's quarterly results offer confidence to issue financial guidance for the 2021 fiscal year.
CDK projects revenue of $2 billion to $2.05 billion for the fiscal year, which was the same range the company offered at the start of the 2020 fiscal year before it was lowered because of the impact from the pandemic.
Net earnings attributable to CDK for the 2021 fiscal year is expected to range between $270 million and $310 million.
Tautges told analysts on Monday's call that the company has settled a lawsuit with data integration service provider Authenticom in an ongoing antitrust case in federal court. A court filing last week indicates the two companies agreed to dismiss Authenticom's claims against CDK filed in 2017 and CDK's counterclaims against Authenticom filed in 2018.
A company spokesman told Automotive News that the settlement terms are confidential.