Tags: US | Earns | CarMax

CarMax Profit Doubles as Revenue Jumps 25 Percent

Thursday, 01 Apr 2010 10:10 AM

 

  Comment  |
   Contact  |
  Print   |
    A   A  
  Copy Shortlink

Used car dealership chain CarMax Inc. said Thursday its fourth-quarter earnings doubled on higher prices and increased customer traffic drove sales. It also plans to resume store growth, a sign of recovery from the worst U.S. auto sales market in decades.

Its shares climbed 74 cents, or 3 percent, to $25.86 in morning trading after trading at a 52-week high of $26.35 earlier in the session.

Stronger sales and profits as well as increasing stability in the credit markets will allow the Richmond company to open between eight and 15 stores over the next two years, said CEO Tom Folliard. It also will open three previously built stores this fiscal year.

Over the past year, CarMax has curtailed its store growth in response to the economic environment, but has said it is committed to resuming its long-term plan of increasing its store base, which had been growing at annual rate of about 15 percent.

CarMax, which operates 100 stores, said it earned $75.4 million, or 33 cents per share, in the three months ended Feb. 28, up from $37.5 million, or 17 cents per share, a year ago. The latest results included a net gain of 7 cents per share related to its financing division.

The company said revenue rose about 25 percent to $1.83 billion from $1.47 billion a year ago, while sales at stores open at least a year rose 12 percent.

Thomson Reuters says analysts were expecting a lower adjusted profit of 25 cents per share on lower revenue of $1.76 billion.

Used vehicle sales rose 13 percent as the company's average selling price rose 10 percent. CarMax said its gross profit per used vehicle sold increased 1.3 percent to $2,067 and total gross profit increased 15 percent primarily because it sold more cars.

The company's auto financing arm reported income of $58.9 million compared with $28 million a year ago.

To weather the weak automotive market and better position it for future growth, CarMax has been focused on lowering expenses, and improving traffic, execution and gross margins. It had lowered its advertising spending and efforts to curb store and corporate overhead costs.

Expenses for the fourth quarter increased 3 percent to $202.2 million compared with the year-ago period.

For the year, the company said it earned $281.7 million, or $1.26 per share, compared with $59.2 million, or 27 cents per share, in the previous year. Revenue for the year increased 7 percent to $7.47 billion from $6.97 billion.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

  Comment  |
   Contact  |
  Print   |
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Obama Set to Clash With Congress on Keystone, Cuba

Monday, 22 Dec 2014 12:37 PM

In his final press conference of the year, President Obama indicated that he plans to take on the new Republican-led Sen . . .

John Kerry to Cuba: 'Tear Down The Digital Wall'

Monday, 22 Dec 2014 12:12 PM

Secretary of State John Kerry issued a challenge to Cuba to "tear down the digital wall," evoking former President Ronal . . .

Military Times: Mere 15% of Troops Approve of Obama

Monday, 22 Dec 2014 11:29 AM

President Obama's approval rating tanked to 15 percent this year among active-duty members of the armed services, reflec . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved