CarMax Inc. Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component CarMax, Inc. (NYSE:KMX) will unveil its latest earnings on Wednesday, December 21, 2011. 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, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 38 cents per share, a rise of 5.6% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 40 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 38 cents during the last month. For the year, analysts are projecting net income of $1.82 per share, a rise of 9.6% from last year.

Past Earnings Performance: Last quarter, the company fell short of estimates by 8 cents, coming in at profit of 49 cents per share against a mean estimate of net income of 51 cents. The company topped expectations in the first quarter.

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Wall St. Revenue Expectations: On average, analysts predict $2.25 billion in revenue this quarter, a rise of 6.1% from the year ago quarter. Analysts are forecasting total revenue of $9.93 billion for the year, a rise of 10.6% from last year’s revenue of $8.98 billion.

Analyst Ratings: Analysts are bullish on this stock with 10 analysts rating it as a buy, none rating it as a sell and three rating it as a hold.

A Look Back: In the second quarter, profit rose 3.7% to $111.9 million (49 cents a share) from $107.9 million (48 cents a share) the year earlier, but fell short analyst expectations. Revenue rose 10.5% to $2.59 billion from $2.34 billion.

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past four quarters. Over that span, the company has averaged growth of 18.7%, with the biggest boost coming in the fourth quarter of the last fiscal year when revenue rose 22.9% from the year earlier quarter.

The company has seen net income rise in three straight quarters. Net income rose 24.9% in the first quarter and 18.8% in the fourth quarter of the last fiscal year.

Competitors to Watch: Copart, Inc. (NASDAQ:CPRT), America’s Car-Mart, Inc. (NASDAQ:CRMT), KAR Auction Services Inc (NYSE:KAR), AutoNation, Inc. (NYSE:AN), Penske Automotive Group, Inc. (NYSE:PAG), General Motors Company (NYSE:GM), Toyota Motor Corp. (NYSE:TM), Honda Motor CO., Ltd. (NYSE:HMC), Ford Motor Company (NYSE:F), Group one Automotive, Inc. (NYSE:GPI), Sonic Automotive, Inc. (NYSE:SAH).

Stock Price Performance: During September 21, 2011 to December 15, 2011, the stock price had risen $2.62 (9.6%) from $27.43 to $30.05. The stock price saw one of its best stretches over the last year between November 23, 2011 and December 6, 2011 when shares rose for nine-straight days, rising 16.9% (+$4.52) over that span. It saw one of its worst periods between May 31, 2011 and June 8, 2011 when shares fell for seven-straight days, falling 10.2% (-$3.04) over that span. Shares are down $1.83 (-5.7%) year to date.

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

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