CarMax Posts 15% Earnings Gain, Shares Drop 8%

CarMax Inc., #1 used-car dealer in the U.S., said Thursday morning its FQ4 2007 earnings increased 15% on strong sales from both its store-based and internet sales divisions. Net earnings went from $36.7 million in Q4 2006 to $42.1 million this year. On the year, earnings jumped 48% to $199 million. EPS were up from $0.17 to $0.19, and $0.92 for the year. Total Q4 sales revenues were up 16% to $1.88 billion, and up 19% on the fiscal year for a total of $7.47 billion in sales. Its CarMax Auto Finance unit saw a 25% rise in income to $31.7 million. CarMax said it plans to open 13 new used car superstores in F2008, along with three additional car buying centers. It forecast F2008 sales growth of 14-20%, and EPS of $1.03-$1.14. CarMax fell just short of analyst Q4 earnings estimates of $0.21/share on revenues of $1.9 billion. In the pre-market, shares are down 8% to $24.95 as of 8:20 ET.

Sources: Press Release, MarketWatch, Bloomberg
Commentary: CarMax: Fast Earnings, Huge Turnover • CarMax's Impressive Growth? We Believe They're Just Getting Started • CarMax Underappreciated by Wall Street (KMX) • CarMax Earnings Conference Call Transcript (later today)
Stocks/ETFs to watch: Carmax Inc. (KMX). Competitors: AutoNation Inc. (AN), United Auto Group Inc. (UAG), Sonic Automotive Inc. (SAH), Copart Inc. (CPRT), Group 1 Automotive Inc. (GPI)

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