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UPDATE 1-CarMax profit rises on used car sales

(Adds earnings details, changes dateline from NEW YORK)

CHICAGO, June 20 (Reuters) - CarMax Inc. , the auto dealership chain, said on Friday quarterly net earnings rose 21 percent, bolstered by stronger sales of used vehicles, even as operating expenses rose.

Results in CarMax's fiscal first quarter met Wall Street expectations, helped by used cars sales, which rose 10 percent at dealerships open at least a year. CarMax had predicted used car same-store sales growth of 7 percent to 9 percent. Combined same-store sales of new and used cars rose 9 percent.

The company said its fiscal second quarter earnings will meet Wall Street expectations. However, used car same-store sales growth will slow to 6 percent to 8 percent in the period. In last year's second quarter, same-store sales grew 12 percent.

CarMax, which was spun off from electronics retailer Circuit City Stores Inc. last year, said the separation boosted costs in the quarter by roughly $5.5 million.

The company, based in Richmond, Virginia, said its net income in the period ended May 31 rose to $35.3 million, or 34 cents per share, from $29.2 million, or 28 cents per share, a year ago.

Wall Street analysts had expected those results on average, based on a poll by Thomson First Call. CarMax had provided the same forecast.

First-quarter revenue rose 17 percent to $1.17 billion from $1.01 billion. In addition to vehicle sales, the amount includes fees from automobile financing and service.

The company forecast that second-quarter earnings would be in a range of 33 cents to 35 cents a share. Analysts' forecasts for the second quarter ranged from 29 cents to 35 cents a share, with an average of 33 cents a share, First Call said. (Additional reporting by Ellis Mnyandu in New York)