KMX: CarMax Stock Slips on Q4 Earnings

Stock misses Wall Street expectations


KMX: CarMax Stock Slips on Q4 Earnings

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 185 KMX: CarMax Stock Slips on Q4 EarningsCarMax 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.

Via MarketWatch:

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.

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