Why KAR Auction Services Shares Dropped

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What: Shares of KAR Auction Services (NYSE: KAR  ) were getting junked today, falling as much as 10%, after it missed earnings estimates in its quarterly report.

So what: The vehicle-auction specialist said adjusted EPS improved 29%, to $0.27; however, analysts were expecting $0.33 a share. Revenue was up 3% from a year ago, to $493.7 million. KAR also noted that, though Superstorm Sandy did not damage any of its property or vehicles, it did delay certain auction activities, and prevented customers from attending some, as well. EPS Guidance for 2013 at $1.13-$1.18 was essentially in line with analyst estimates of $1.18.

Now what: KAR shares bottomed out early in the session, but recovered to finish the day down only 3%. Vehicle demand appears to be growing with the average car age in the U.S. now at 11, which should favor KAR in the coming years. Today's initial drop shouldn't be cause for concern.

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Jeremy Bowman

Fool since 2011. I write about consumer goods, the big picture, and whatever else piques my interest. Follow me on Twitter to see my latest articles, and for commentary on hot topics in retail and the broad market.

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4/29/2016 3:36 PM
KAR $37.60 Down -0.45 -1.17%
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