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VOL. 37 | NO. 38 | Friday, September 20, 2013

CarMax 2Q results top Street, used car sales rise

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NEW YORK (AP) — CarMax's fiscal second-quarter net income rose 26 percent, as the chain of used car dealerships continued to be bolstered by higher sales.

The chain CarMax also says it plans to hire more than 1,000 workers across the country.

The results topped analysts' estimates, and CarMax stock rose in Tuesday premarket trading.

The Richmond, Va.-based chain earned $140.3 million, or 62 cents per share, for the three months ended Aug. 31. That compares with $111.6 million, or 48 cents per share, in the 2012 second quarter.

Analysts, on average, expected earnings of 57 cents per share, according to a FactSet survey.

Shares of CarMax climbed $2.34, or 4.7 percent, to $52.35 before the market open.

Revenue increased 18 percent to $3.25 billion from $2.76 billion. Wall Street expected revenue of $3.17 billion.

Sales of used cars climbed more than 20 percent. Wholesale sales rose nearly 9 percent on an increase in the appraisal buy rate and more stores being open. New car sales, which make up a smaller part of CarMax's business, fell 2 percent. Other sales and revenue, which includes fees it receives from third-party lenders its customers use, increased 5 percent.

Used cars sales at locations open at least a year rose 16 percent, helped by a modest rise in traffic and better consumer credit conditions. This figure excludes results from dealerships recently opened or closed, giving a picture of growth at continuing locations.

Gross profit, which is the profit after reconditioning and other costs, climbed 18 percent $434.7 million. Meanwhile, income from CarMax's auto financing arm increased 12 percent to $84.4 million.

CarMax Inc. currently runs 123 used car stores in 61 markets.

In premarket trading, CarMax shares added $2.19, or 4.4 percent, to $52.20. The stock closed Monday at $50.01, up 33 percent since the start of the year.