KAR Auction Services
The 10-second takeaway
For the quarter ended March 31 (Q1), KAR Auction Services met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share contracted significantly.
Gross margins increased, operating margins shrank, net margins dropped.
KAR Auction Services chalked up revenue of $506.9 million. The 10 analysts polled by S&P Capital IQ predicted revenue of $503.9 million on the same basis. GAAP reported sales were 5.0% higher than the prior-year quarter's $482.7 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.31. The 10 earnings estimates compiled by S&P Capital IQ anticipated $0.31 per share. GAAP EPS of $0.19 for Q1 were 34% lower than the prior-year quarter's $0.29 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 46.9%, 140 basis points better than the prior-year quarter. Operating margin was 14.8%, 70 basis points worse than the prior-year quarter. Net margin was 5.1%, 310 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $496.9 million. On the bottom line, the average EPS estimate is $0.33.
Next year's average estimate for revenue is $1.97 billion. The average EPS estimate is $1.17.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 20 members out of 23 rating the stock outperform, and three members rating it underperform. Among nine CAPS All-Star picks (recommendations by the highest-ranked CAPS members), nine give KAR Auction Services a green thumbs-up, and give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on KAR Auction Services is outperform, with an average price target of $18.79.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.