CarMax revenue jumps as easier credit boosts used car sales

Features Reuters

CarMax Inc, the largest U.S. used-car seller, reported a 16 percent rise in quarterly revenue as easier availability of credit helped it sell more pre-owned vehicles at higher prices.

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Shares of the company, which also sells new cars, rose 8 percent in premarket trading.

U.S. auto loan originations in the third quarter hit the highest level since 2005, according to a survey published by the Federal Reserve Bank of New York in November.

The average size of a used car loan rose nearly 4 percent in the quarter to a record high of $18,576, according to the Manheim Used Vehicle Value Index.

CarMax said its used vehicle sales rose 17 percent in the third quarter ended Nov. 30, accounting for more than three-quarters of the company's total revenue. Unit sales rose 14 percent, while average price increased 2.3 percent.

CarMax's net income rose to $130 million, or 60 cents per share, from $106.5 million, or 47 cents per share, a year earlier.

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Revenue increased to $3.41 billion from $2.94 billion.

Analysts on average had expected earnings of 54 cents per share and revenue $3.26 billion, according to Thomson Reuters I/B/E/S.

CarMax's shares closed at $60.53 on the New York Stock Exchange on Thursday. Up to Thursday's close, the stock had risen about 29 percent this year. (Reporting by Ankit Ajmera in Bengaluru; Editing by Kirti Pandey)