On Dec. 20, auto dealer and Inside Value recommendation CarMax (NYSE:KMX) released its third-quarter earnings for the period ending Nov. 30.
- Sales grew 24% for the quarter. Used-car sales powered the quarter with solid increases in both volume and price.
- Margins increased across the board, causing net profit to almost double. You gotta love it when operating leverage works in your favor.
- CarMax is a four-star stock in our community intelligence service CAPS, with 120 of 129 investors thinking it will outperform the S&P500.
(Figures in millions, except per-share data)
Income Statement Highlights
|
Q3 2006 |
Q3 2005 |
Change | |
|---|---|---|---|
|
Sales |
$1,768.1 |
$1,424.0 |
24.2% |
|
Net Profit |
$45.4 |
$22.9 |
98.3% |
|
EPS |
$0.42 |
$0.22 |
90.9% |
|
Diluted Shares |
108.9 |
106.5 |
2.3% |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q3 2006 |
Q3 2005 |
Change* | |
|---|---|---|---|
|
Gross Margin |
12.9% |
12.4% |
0.5 |
|
Operating Margin |
4.2% |
2.7% |
1.5 |
|
Net Margin |
2.6% |
1.6% |
1.0 |
Margins are the earnings engine. See how they work.
Balance Sheet Highlights
|
Assets |
Q3 2006 |
Q3 2005 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$12.4 |
$17.3 |
(28.4%) |
|
Accounts Rec.* |
$258.8 |
$216.0 |
19.8% |
|
Inventory |
$760.8 |
$606.4 |
25.5% |
|
Liabilities |
Q3 2006 |
Q3 2005 |
Change |
|---|---|---|---|
|
Accounts Payable |
$222.2 |
$173.3 |
28.2% |
|
Long-Term Debt** |
$118.4 |
$125.0 |
(5.3%) |
**Includes current portion
Learn the ways of the balance sheet.
Cash Flow Highlights
|
YTD 2006 |
YTD 2005 |
Change | |
|---|---|---|---|
|
Cash From Ops. |
$137.6 |
$139.1 |
(1.1%) |
|
Capital Expenditures* |
$111.2 |
$75.3 |
47.7% |
|
Free Cash Flow |
$26.4 |
$63.8 |
(58.6%) |
Find out why Fools always follow the money.
Related Companies:
- AutoNation (NYSE:AN)
- Group 1 Automotive (NYSE:GPI)
- United Auto Group (NYSE:UAG).
Related Foolishness:
- CarMax Shifts Gears
- CarMax Revs Its Engine: Fool by Numbers
- Foolish Forecast: Reading CarMax's Manual
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At the time of publication, David Meier did not own shares in any of the companies mentioned. Fool rules for disclosure are here.
