CarMax Soars as Earnings, Revenues Top Analyst Estimates
CarMax Inc., the biggest U.S. auto dealer by market valuation, soared the most in five years after its fiscal first-quarter earnings and revenue topped analyst estimates as increased customer traffic boosted vehicle sales, reported Bloomberg.
Shares of CarMax jumped more than 16 percent to $52.75 at the close in New York, the biggest gain since June 19, 2009. CarMax had declined 3.7 percent this year through yesterday.
Net income for the three months ended May 31 rose 16 percent to $169.7 million, or 76 cents a share, the Richmond, Virginia-based company said in a statement. Analysts had estimated 67 cents, on average. Revenue advanced 13 percent to $3.75 billion, compared with a $3.59 billion projection from analysts.
Demand for autos has risen with an improving job market, more housing starts and low interest rates. That drove the annualized pace for new light-vehicles sales, adjusted for seasonal trends, to 16.8 million last month, the fastest rate since February 2007, according to Autodata Corp. CarMax said comparable-store sales rose 3.4 percent, with used-vehicle revenues advancing 13 percent and new-model revenue jumping 33 percent. CarMax operates 136 used-car superstores in 68 markets.
CarMax’s financing unit saw income rise 8.7 percent to $94.6 million during the period, as the company continues testing a subprime loan program. Some $20.5 million, or 0.8 percent of retail unit sales, were originated through that program during the period, according to the statement.
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