Carvana Soars As Record Sales Of Used Vehicles Drive First Net Profit
By Dhirendra Tripathi
Investing.com – Carvana (NYSE:CVNA) stock soared over 9% in Friday’s trading as a booming market for used vehicles, coming at a time chip shortage has held back sales of new units, propelled the company to its first ever quarter of net profit.
June-quarter revenue of $3.33 billion was also the first time the company crossed the $3-billion mark, almost trebling from $1.11 billion in the same period last year.
Net income was $45 million, up from a loss of $106 million in the prior-year period.
Retail sales also touched a record and almost doubled to 107,815 units from 55,098 units in the June quarter of 2020.
Retailers of used cars like Carvana and CarMax (NYSE:KMX) have benefited immensely from the chip shortage that has hurt carmakers. Customers have had to face long waiting periods as shortage of chips has delayed production of vehicles.
The pandemic fueled unprecedented demand for digital devices like laptops, mobiles and printers as companies and individuals went for a hybrid office-home model. Vehicle manufacturers were the worst hit.
Total gross profit per unit for the second quarter was $5,120, an increase of $2,394.
For the full year now, Carvana expects GPU at over $4,000, significantly above its mid-$3,000s outlook at the beginning of the year.
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