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CarMax Revs Its Engine: Fool by Numbers

On Sept. 20, 2006, automotive dealership and Inside Value recommendation CarMax (NYSE: KMX  ) released its second-quarter earnings for the period ending Aug. 26, 2006.

  • CarMax restated its results for last year's quarter to account for SFAS 123R (that's the new rules on accounting for stock options).
  • It's always nice to see margins expand. That means the company is making a little more money on each sale today than it did yesterday.
  • Cash flow from operations was down due to increased investments in working capital.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q2 2007

Q2 2006

Change

Sales

$1,855

$1,930

$1,634

18.1%

Net Profit

--

$54

$38

44.4%

EPS

$0.41

$0.50

$0.35

42.9%

Diluted Shares

108

106

1.3%

Get back to basics with a look at the income statement.

Margin Checkup

Q2 2007

Q2 2006

Change*

Gross Margin

13.13%

12.77%

0.36

Operating Margin

4.66%

3.73%

0.93

Net Margin

2.81%

2.30%

0.51

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q2 2007

Q2 2006

Change

Cash + ST Invest.

$24

$42

(43.1%)

Accounts Rec.

$257

$220

16.7%

Inventory

$734

$585

25.5%



Liabilities

Q2 2007

Q2 2006

Change

Accounts Payable

$190

$148

28.2%

Long-Term Debt

$34

$35

(2.8%)

Learn the ways of the balance sheet.

Cash Flow Highlights

Q2 2007

Q2 2006

Change

Cash From Ops.

$87

$117

(25.6%)

Capital Expenditures

$51

$37

37.3%

Free Cash Flow

$36

$80

(54.8%)

Find out why Fools always follow the money.

Related Companies:

  • AutoNation (NYSE: AN  )
  • Asbury Automotive Group (NYSE: ABG  )
  • Lithia Motors (NYSE: LAD  )
  • Group 1 Automotive (NYSE: GPI  )

Related Foolishness:

Inside Value lead analyst Philip Durell thinks CarMax is a bargain. To find out why, come take a free trial of the newsletter.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so checkFool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, David Meier did not own shares in any of the companies mentioned. Fool rules for disclosure are here.


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Related Tickers

2/14/2012 4:03 PM
KMX $29.72 Up +0.10 +0.34%
CarMax, Inc. CAPS Rating: ***
GPI $54.30 Up +1.13 +2.13%
Group 1 Automotive… CAPS Rating: **
LAD $26.28 Up +0.12 +0.46%
Lithia Motors, Inc… CAPS Rating: ***
ABG $26.50 Up +1.84 +7.46%
Asbury Automotive… CAPS Rating: *****
AN $35.15 Down -0.75 -2.09%
AutoNation, Inc. CAPS Rating: *

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