Tags: auto | dealers | used | new

Auto Dealers: Used Outshines New

By    |   Monday, 02 April 2012 09:48 AM

Publicly traded car dealership companies are divided between those primarily selling new cars and the sales of used vehicles. AutoNation (AN) owns a portfolio of new car dealerships covering import, domestic and luxury brands. CarMax (KMX) owns a nationwide chain of used car dealerships. Copart (CPRT) provides online auction services for vehicles re-marketed through the company's 140 consignment facilities.

The auto dealership sector is very dependent on consumer sentiment and the state of the economy as viewed by the average potential car buyer.

For 2011, AutoNation sold 24,342 new cars from its 250 dealerships, an 11 percent increase. Luxury brand and domestic sales were up 32 and 17 percent respectively, while import brand sales were flat.

Revenue for the year was up 10 percent and net income of $1.94 per share was 24 percent better than the 2010 results.

AutoNation results reflect the national new car sales levels, which are expected to increase again in 2012. The Wall Street consensus estimate for 2012 is net income of $2.22 per share.

The CarMax 2012 fiscal year ended on Feb. 29. For the first three quarters of the fiscal year the company reported revenue of $7.53 billion, an increase of 12 percent. Net income increased by 8.6 percent to $1.39 per share. The full year earnings estimate is $1.78 per share.

In calendar 2011 the company added three new stores. Plans are for the addition of five stores in 2012 and eight to 10 in 2012. CarMax currently operates 108 used car superstores. The Wall Street earnings estimate for fiscal 2012 is earnings of $1.93.

Copart closed the first half of the company's 2012 fiscal year on Jan. 31, 2011. For the six months, revenue increased 8 percent to $453 million and net income was up 35 percent to $1.23 per share.

The full year earnings estimate is $2.78 per share compared to $2.17 a year earlier. Copart management publishes no additional information besides the Securities and Exchange Commission required quarterly results.

Moderate buy

Over the most recent six month period, the share values of the two used car companies increased by approximately 20 percent. The share price of new cars sales organization AutoNation declined by 10 percent.

Of the three companies, CarMax has the highest average rating from Wall Street analysts, at moderate buy.

CarMax, AutoNation and Copart next report on April 5, April 25 and May 29, respectively.

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Monday, 02 April 2012 09:48 AM
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