CarMax revenue up 9 pct; increases share buyback by $1 bln

Reuters

(Adds details, background)

April 4 (Reuters) - CarMax Inc, the largest retailer of used cars in the United States, reported a higher quarterly revenue and said it had increased its share buyback program by $1 billion.

Increased bank lending to subprime borrowers - those with poor credit profiles - drove auto sales and much of car dealerships' profit in 2013. Lending to these borrowers dried up after the start of the credit crisis in 2008.

About a fifth of the company's business comes from subprime customers.

CarMax, which also sells new cars, said used car sales rose 12 percent to 132,856 in the fourth quarter ended Feb. 28. New car sales also rose 7 percent to 1,807 units.

The company's net income fell to $99.2 million, or 44 cents per share, in the quarter, from $107.2 million, or 46 cents per share, a year earlier.

Its profit included 8 cents per share related to an increase in cancellation reserves.

The company's revenue rose 9 percent to $3.08 billion in the quarter, from $2.83 billion a year earlier.

Analysts on average expected a profit of 53 cents per share on revenue of $3.18 billion, according to Thomson Reuters I/B/E/S.

Carmax's shares closed at $47.56 on the New York Stock Exchange on Thursday.

(Reporting By Abinaya Vijayaraghavan and Mridhula Raghavan in Bangalore)

Rates

View Comments (2)