CarMax Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component CarMax (NYSE:KMX) will unveil its latest earnings on Thursday, December 20, 2012. CarMax is a retailer of used vehicles in the United States. The company also sells new vehicles under franchise agreements with Chrysler, General Motors, Nissan, and Toyota.

CarMax Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 39 cents per share, a rise of 8.3% from the company’s actual earnings for the year-ago quarter. The average estimate is the same as three months ago. Between one and three months ago, the average estimate moved down. It has risen from 38 cents during the last month. For the year, analysts are projecting profit of $1.83 per share, a rise of 2.2% from last year.

Past Earnings Performance: Last quarter, the company fell short of estimates by 0 cents, coming in at net income of 48 cents per share against a mean estimate of profit of 52 cents. The company fell in line with expectations in the first quarter.

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Wall St. Revenue Expectations: Analysts are projecting a rise of 8.8% in revenue from the year-earlier quarter to $2.46 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 3.73 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands.

Analyst Ratings: With nine analysts rating the stock a buy, none rating it a sell and three rating the stock a hold, there are indications of a bullish stance by analysts.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 6.7% in the third quarter of the last fiscal year, 9.9% in the fourth quarter of the last fiscal year and 3.5% in the first quarter before increasing again in the second quarter.

An income boost this time around would be welcome news after profit declines in the past two quarters. Net income dropped 4.4% in the first quarter and then again in the second quarter.

A Look Back: In the second quarter, profit fell 0.2% to $111.6 million (48 cents a share) from $111.9 million (49 cents a share) the year earlier, missing analyst expectations. Revenue rose 6.6% to $2.76 billion from $2.59 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)