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Copart Beats Estimates

Zacks Equity Research

Copart, Inc. (CPRT) reported earnings per share of 38 cents in the second quarter of fiscal 2013 ended Jan 31, 2013, up 22.6% from 31 cents in the corresponding quarter last year. The quarterly EPS surpassed the Zacks Consensus Estimate by a penny. In absolute terms, adjusted profits improved 31.4% to $53.34 million from $40.6 million in the year-ago quarter.

Profits in the reported quarter were affected by additional costs of $11.9 million or 6 cents per share associated with hurricane Sandy. Implementation of ERP system also resulted in incremental costs of $1.8 million or 1 cent during the quarter.

The company’s revenues went up 16.8% to $266.2 million in the quarter, beating the Zacks Consensus Estimate of $246.0 million. Service revenues augmented 16.1% to $216.9 million and revenues from vehicles sale went up 20% to $49.3 million.

Gross profits decreased 2.9% to $96.8 million (36.4% of sales) from $99.7 million (or 43.7%) in the year-ago quarter due to higher operating costs and expenses. Consequently, operating income dropped 1.2% to $62.8 million from $63.5 million recorded in the second quarter of fiscal 2012. Operating margin was 23.6% compared with 27.9% in the year-ago quarter.

Financial Details

Copart had cash and cash equivalents of $49.5 million as of Jan 31, 2013 versus $140.1 million as of Jul 31, 2012. Total debt and capital lease obligations amounted to $408.2 million as of Jan 31, 2013 compared with $444.1 million as of Jul 31, 2012.

During the first six months of fiscal 2013, the company generated net cash flow of $53.1 million from operations compared with $90.3 million in the same period a year ago. Capital spending was $108.7 million compared with $14.3 million in the first half of fiscal 2012.

Our Take

Copart is a provider of online auctions and vehicle remarketing services in the U.S., Canada, U.K. and U.A.E. and operates 162 facilities. The company provides a wide range of remarketing services to vehicle suppliers, primarily insurance companies, to process and sell salvage vehicles mainly over the Internet through the company's Virtual Bidding Internet auction-style sales technology. The company currently retains a Zacks Rank #3 (Hold).

A few stocks that are also performing well in the industry where Copart operates are Sotheby's (BID), CarMax Inc. (KMX) and Asbury Automotive Group, Inc. (ABG). They carry a Zacks Rank #2 (Buy).

Read the Full Research Report on KMX

Read the Full Research Report on BID

Read the Full Research Report on CPRT

Read the Full Research Report on ABG

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