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Carvana (CVNA) Q3 Earnings Top Estimates, Revenues Fall Y/Y
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Carvana Co. (CVNA - Free Report) delivered earnings per share of $3.60 in third-quarter 2023, significantly rising from the loss of $2.67 incurred in the year-ago quarter and outpacing the Zacks Consensus Estimate of a loss of 85 cents per share. Revenues of $2,773 million topped the Zacks Consensus Estimate of $2,742 million but fell 18% year over year.
Total gross profit amounted to $482 million, up 34% year over year.
Total gross profit per unit (GPU) was $5,952, reflecting a jump of 70.1% year over year. It topped our estimate of $5,517 on fundamental improvements in the operations of the business.
SG&A expenses were $433 million, down 34% year over year.
Carvana achieved a positive adjusted EBITDA of $148 million in the third quarter of 2023. Adjusted EBITDA also included a non-recurring benefit of approximately $40 million.
Segmental Performance
Retail vehicle sales totaled $1,949 million in the quarter, falling 21.8% year over year but topping our estimate of $1,775 million, courtesy of higher-than-expected sales volume. During the reported quarter, the number of vehicles sold to retail customers declined 21% to 80,987 from the prior-year period but surpassed our estimate of 76,532 units.
Gross profit amounted to $218 million, rising 87.9% and beating our projection of $204.6 million. GPU came in at $2,692, up from $1,131 generated in the year-ago period, as well as ahead of our expectations of $2,674 million, owing to better-than-anticipated revenues.
In the third quarter, wholesale vehicle sales totaled $610 million, falling 12.5% year over year and lagging our forecast of $644.1 million. Gross profit came in at $50 million, up 8.7% year over year but missing our estimate of $51.7 million. GPU came in at $618, rocketing from $448 due to a higher ratio of wholesale units sold to retail units sold and lower inbound transport costs.
In the period under consideration, other sales and revenues rose 8.6% year over year to $214 million. Gross profit was $214 million, up 8.6% year over year. GPU came in at $2,642, up 37.5% year over year as well as ahead of our estimate of $2,168 million, courtesy of better-than-anticipated revenues.
Results got a boost from an increased volume of loans held and sold compared with the volume of retail units sold, along with higher origination interest rates in comparison to benchmark interest rates.
Financial Position
Carvana had cash and cash equivalents of $544 million as of Sep 30, 2023 compared with $434 million on Dec 31, 2022. Long-term debt amounted to $5,305 million as of Sep 30, 2023 compared with $6,574 million recorded on Dec 31, 2022.
Q4 Outlook
The company expects to generate positive adjusted EBITDA for the third straight quarter in the October-December period. Carvana expects the total non-GAAP GPU to exceed $5,000 in the fourth quarter of 2023. It anticipates its fourth-quarter retail units to decline due to industry and seasonal patterns.
The Zacks Consensus Estimate for TM’s 2023 sales and earnings implies year-over-year growth of 10.6% and 30.9%, respectively. The EPS estimates for 2023 and 2024 have increased by 45 cents and 40 cents, respectively, in the past seven days.
The Zacks Consensus Estimate for HMC’s 2023 sales and earnings suggests year-over-year improvements of 7.7% and 31%, respectively. The EPS estimates for 2023 and 2024 have moved up by 9 cents and 24 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for MOD’s 2023 sales and earnings indicates year-over-year rises of 7.2% and 52.3%, respectively. The EPS estimates for 2023 and 2024 have increased by 9 cents and 5 cents, respectively, in the past seven days.
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Carvana (CVNA) Q3 Earnings Top Estimates, Revenues Fall Y/Y
Carvana Co. (CVNA - Free Report) delivered earnings per share of $3.60 in third-quarter 2023, significantly rising from the loss of $2.67 incurred in the year-ago quarter and outpacing the Zacks Consensus Estimate of a loss of 85 cents per share. Revenues of $2,773 million topped the Zacks Consensus Estimate of $2,742 million but fell 18% year over year.
Carvana Co. Price, Consensus and EPS Surprise
Carvana Co. price-consensus-eps-surprise-chart | Carvana Co. Quote
Key Highlights
Total gross profit amounted to $482 million, up 34% year over year.
Total gross profit per unit (GPU) was $5,952, reflecting a jump of 70.1% year over year. It topped our estimate of $5,517 on fundamental improvements in the operations of the business.
SG&A expenses were $433 million, down 34% year over year.
Carvana achieved a positive adjusted EBITDA of $148 million in the third quarter of 2023. Adjusted EBITDA also included a non-recurring benefit of approximately $40 million.
Segmental Performance
Retail vehicle sales totaled $1,949 million in the quarter, falling 21.8% year over year but topping our estimate of $1,775 million, courtesy of higher-than-expected sales volume. During the reported quarter, the number of vehicles sold to retail customers declined 21% to 80,987 from the prior-year period but surpassed our estimate of 76,532 units.
Gross profit amounted to $218 million, rising 87.9% and beating our projection of $204.6 million. GPU came in at $2,692, up from $1,131 generated in the year-ago period, as well as ahead of our expectations of $2,674 million, owing to better-than-anticipated revenues.
In the third quarter, wholesale vehicle sales totaled $610 million, falling 12.5% year over year and lagging our forecast of $644.1 million. Gross profit came in at $50 million, up 8.7% year over year but missing our estimate of $51.7 million. GPU came in at $618, rocketing from $448 due to a higher ratio of wholesale units sold to retail units sold and lower inbound transport costs.
In the period under consideration, other sales and revenues rose 8.6% year over year to $214 million. Gross profit was $214 million, up 8.6% year over year. GPU came in at $2,642, up 37.5% year over year as well as ahead of our estimate of $2,168 million, courtesy of better-than-anticipated revenues.
Results got a boost from an increased volume of loans held and sold compared with the volume of retail units sold, along with higher origination interest rates in comparison to benchmark interest rates.
Financial Position
Carvana had cash and cash equivalents of $544 million as of Sep 30, 2023 compared with $434 million on Dec 31, 2022. Long-term debt amounted to $5,305 million as of Sep 30, 2023 compared with $6,574 million recorded on Dec 31, 2022.
Q4 Outlook
The company expects to generate positive adjusted EBITDA for the third straight quarter in the October-December period. Carvana expects the total non-GAAP GPU to exceed $5,000 in the fourth quarter of 2023. It anticipates its fourth-quarter retail units to decline due to industry and seasonal patterns.
Zacks Rank & Key Picks
CVNA currently carries a Zacks Rank #2 (Buy).
Some other top-ranked players in the auto space are Toyota Motor (TM - Free Report) , Honda Motor Co., Ltd. (HMC - Free Report) and Modine Manufacturing Company (MOD - Free Report) , each sporting Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TM’s 2023 sales and earnings implies year-over-year growth of 10.6% and 30.9%, respectively. The EPS estimates for 2023 and 2024 have increased by 45 cents and 40 cents, respectively, in the past seven days.
The Zacks Consensus Estimate for HMC’s 2023 sales and earnings suggests year-over-year improvements of 7.7% and 31%, respectively. The EPS estimates for 2023 and 2024 have moved up by 9 cents and 24 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for MOD’s 2023 sales and earnings indicates year-over-year rises of 7.2% and 52.3%, respectively. The EPS estimates for 2023 and 2024 have increased by 9 cents and 5 cents, respectively, in the past seven days.