(Recasts first two paragraphs, updates stock price)
DETROIT, Sept 22 (Reuters) - Auto retailer CarMax Inc. on Monday said its quarterly profit rose 25 percent, but its shares fell 4.5 percent after the company lowered earnings estimates for the current quarter.
CarMax President and Chief Executive Officer Austin Ligon said the estimated impact of Hurricane Isabel and somewhat softer-than-expected sales in early September also caused the company to lower its expectations for used vehicle sales growth at existing stores. The company now sees that growth in a range of 4 percent to 6 percent for the current fiscal third quarter, from a previous estimate of 5 percent to 7 percent.
"September has been a softer-than-expected month, and it is fairly broad across regions and across categories," Ligon said in a conference call with analysts. "The truth is, I think there is no single reason for it. It is a combination of all the various things going on in the market."
The Richmond, Virginia, company said its fiscal third quarter earnings per share would be in the range of 19 cents to 21 cents, below Wall Street estimates of 22 cents a share, according to Thomson First Call.
Ligon said CarMax expected to regain some of the sales lost to Hurricane Isabel, and projected full-year income in a range of $1.11 to $1.16 per share, compared with Wall Street's estimate of $1.15 per share.
CarMax shares were down $1.61 at $34.32 in morning trading on the New York Stock Exchange. CarMax's shares have soared this year, outperforming the Standard & Poor's 500 Index by more than 60 percent since the beginning of the year.
Ligon said second-quarter results were boosted by stronger used and wholesale vehicle sales and higher service profits.
Net income in the second quarter ended Aug. 31 rose to $39.6 million, or 37 cents per share, compared with a profit of $31.7 million, or 30 cents per share, in the year-ago quarter.
CarMax earlier this month said it expected earnings of 36 cents per share, up from its previous forecast of 33 cents to 35 cents per share.
Ligon said the company was able to beat its estimate thanks to higher unit sales, higher transaction prices and better margins on repairs, offset in part by lower-than-expected income from financing vehicle sales.