CarMax stock (KMX) is down following the company’s fourth quarter results showed revenue growth, but an earnings drop due to an accounting correction.
CarMax stock is down 4% in pre-market trading.
For Q4, CarMax announced a $99.2 million profit (44 cents a share), which was down from $107.2 million (46 cents a share) for the same period last year.
Thomson Reuters had polled analysts who projected a $3.12 billion revenue (52 cents a share.)
While revenue rose 8%, an accounting correction reduced per-share earnings by eight cents, the company said, relating the error to CarMax’s extended-service plan and asset protection line of products.
CarMax has benefited as customers, struggling with a mediocre economic recovery, have bought more used cars. That trend continued in the most-recent period, as used vehicles sold increased 12% to $2.57 billion. On a same-store basis, sales rose 7%.
The auto-finance unit’s income rose 6.3% to $80.8 million as an increase in auto-loan receivables was offset in large part by lower total interest margin.
CarMax also reported that its Board of Directors approved a $1 billion extension of its share buyback plan.
