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UPDATE 1-CarMax quarterly earnings rise 18 percent

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DETROIT, March 30 (Reuters) - Auto retailer CarMax Inc. on Tuesday reported an 18-percent rise in its quarterly net earnings, driven by strong wholesale and used-vehicle sales.

The Richmond, Virginia-based company said net income in the fiscal fourth quarter that ended Feb. 29 rose to $22.5 million, or 21 cents per share, compared with a profit of $19.1 million, or 18 cents a share, in the year-ago quarter.

Wall Street analysts on average had expected earnings of 21 cents per share according to Reuters Research, a unit of Reuters Group Plc.

Fourth-quarter net earnings per share included 1 cent per share from the sale of new car franchises, CarMax said.

It said it continues to expect average annual earnings growth of 20 percent and sees fiscal 2005 earnings per share between $1.21 and $1.26, the latter being the average estimate of Wall Street analysts.

Revenue in the fiscal fourth quarter rose to $1.12 billion from $946.6 million, CarMax said.

The company opened nine new used car superstores in fiscal 2004 compared with five in 2003.

"Our revenue and earnings growth expectations are based on expanding our store base by 15 to 20 percent annually, as well as on our comparable store used unit growth," Austin Ligon, CarMax president and chief executive, said in a statement.