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CarMax 4Q profit falls 7 pct on accounting change

RICHMOND, Va. (AP) -- CarMax Inc. said Friday that its fourth-quarter net income fell 7 percent, as the effects of an accounting correction offset higher vehicle demand. Its revenue rose but missed Wall Street expectations.

Investors were disappointed and CarMax shares fell in premarket trading.

For the quarter ended Feb. 28, CarMax earned $99.2 million, or 44 cents per share, compared with $107.2 million, or 46 cents per share, a year ago.

The Richmond, Va.-based company said it made an accounting correction during the recent quarter that reduced its earnings per share by 8 cents. Excluding that, it would have earned 52 cents per share. That was a penny below Wall Street expectations.

Net sales and operating revenue rose 9 percent to $3.08 billion from $2.83 billion. Analysts surveyed by FactSet, on average, expected $3.19 billion in revenue.

CarMax said its used vehicle sales at stores open at least a year increased 7 percent, while total used unit sales rose 12 percent.

Income from the company's financing division increased 6 percent to $80.8 million.

For the full year, CarMax earned $492.6 million, or $2.16 per share, up from $434.3 million, or $1.87 per share. Revenue increased to $12.57 billion from $10.96 billion.

CarMax also said Friday that its board approved a $1 billion expansion of the company's stock buyback program. The authorization expires at the end of 2015.

The new authorization is in addition to the $800 million in buybacks previously authorized by the board, of which $282.1 million remained available as of Feb. 28.

Its shares fell 66 cents, or 1.3 percent, to $46.90 in premarket trading shortly before the market opened.

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