CarMax Thoroughly Beats Earnings Estimates

CarMax's third quarter profit nearly doubled and it raised its forecast for the third time in two months as consumers opt for more expensive vehicles. The largest used-car retailer in the U.S. reported an increase of $0.42 a share over $0.22 last year, beating Street estimates of $0.25. Net income soared to $45.4 million from $22.9 million y/y, and sales rose 24% to $1.77 billion from $1.42 billion. CarMax raised its 2007 forecast from $1.75 to $1.85 a share as customers are purchasing more luxury cars and pick-up trucks. On the news of CarMax's healthy performance, shares rose 11% to $54, just short of its 52-week high of $55.19.

• Sources: Carmax F3Q07 Earnings Conference Call Transcript, Bloomberg, Business Week Marketwatch, MSN Moneycentral
• Related commentary: Carmax: Fast Earnings, Huge Turnover, Carmax's Impressive Growth
• Potentially impacted stocks and ETFs: CarMax (KMX).Competitors: United Auto Group (UAG), Auto Nation (AN)

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