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CarMax Rises Sharply as Strong Demand Boosts Earnings, Sales

Strong consumer demand for used cars, fueled by government stimulus, helps boost CarMax's earnings and sales.

CarMax  (KMX) - Get Report shares rose sharply Friday after the used car retailer posted fiscal first-quarter earnings and sales that smashed analysts' estimates.

CarMax reported revenue of $7.7 billion in the quarter, more than double last year’s total of $3.229 billion amid strong demand for used cars. The FactSet analyst consensus called for revenue of $6.183 billion in the latest quarter.

Net income totaled $436.8 million, or $2.63 a share, up from $4.98 million, or 3 cents a share, a year ago. Analysts predicted $1.63 a share for the latest quarter.

Government stimulus money helped boost demand, CarMax said.

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Shares traded at $126, up 5.5%, in premarket trading Friday and have soared 29% in the past six months.

"Our strong performance, which included record net revenue and profitability, reflects the strength of our omni-channel experience and diversified business model across retail, wholesale and CarMax Auto Finance,” said Chief Executive Bill Nash.