Car-Mart Shares Climb on Strong 3Q Earnings
by February 15, 2012 3:38 pm 112 views
Shares of America’s Car-Mart Inc. rose sharply Thursday after the company posted a 40.4 percent increase in third-quarter profit.
The Bentonville-based used-car retailer released earnings late Wednesday, reporting net profit of $7.3 million, or 73 cents per share, for the quarter that ended Jan. 31, compared to earnings of $5.69 million, or 52 cents per share, in the same period a year ago.
On Thursday, Car-Mart’s shares rose $5.28 cents, or 13.16 percent, closing at $45.41 on the Nasdaq. The stock’s previous high for the past year was $41.23, with a low of $22.77.
The company’s earnings beat the average estimate of 69 cents per share from four analysts surveyed by Thomson Reuters.
Revenue rose 13.8 percent to $105.37 million from $92.57 million.
Car-Mart saw retail unit sales increase 8.5 percent to 8,965 from 8,266 in the same quarter last year. Operating in nine states, it recently opened its 112th lot.
The company focuses on the “buy here, pay here” segment of the used-car market, providing financing for most of its customers.
“By staying focused on customer success, we have been able to consistently produce outstanding returns,” president and CEO William H. “Hank” Henderson said in a news release. “All of our efforts are directed to helping our customers succeed by working with them when they experience financial difficulties.”
CFO Jeff Williams said in the release that the company’s credit results have been strong and consistent for several years.
If collection results for the fourth quarter come in within the anticipated range, he said, Car-Mart may need to reduce its allowance for credit losses.