Car retailer CarMax, Inc (KMX) on Tuesday said its second quarter profit jumped more than seven-fold from last year, helped by higher sales and a big one-time gain.
The Richmond, Virginia-based company reported second quarter net income of $103 million, or 46 cents per share, up from $14 million, or 6 cents per share, in the year-ago period. Excluding a one-time gain in its financing division, adjusted profit was 36 cents per share.
Overall sales rose 13% from last year to $2.08 billion, while same-store jumped 8%.
On average, Wall Street analysts expected a much lower profit of 18 cents per share, on significantly lower revenue of $1.77 billion.
CarMax said that used car sales rose 9.6% in the latest quarter, while new car sales jumped 18.5%. CEO Tom Folliard commented that ''We are extremely pleased to report a record level of quarterly income, despite the continued challenging economic environment.''
CarMax shares rose $1.93, or +9.4%, in morning trading Tuesday.
The Bottom Line
Shares of KMX are breaking through their 52-week high levels of $21 a share. The stock has technical support in the $16-$18 price area. If the shares can build momentum on today's news, we see the next level of overhead resistance around the $22-$23 price levels. We do not currently rate this non-dividend paying stock, but we do follow this company closely.
CarMax, Inc (KMX) does not currently pay a dividend.
