Copart's (CPRT) Q4 Earnings Beat on Strong Vehicle Sales

Copart, Inc. CPRT reported fourth-quarter fiscal 2022 (ended Jul 31, 2022) adjusted earnings per share of $1.13, topping the Zacks Consensus Estimate of $1.08. The outperformance was due to higher-than-anticipated revenues from vehicle sales. The bottom line rose 9.7% year over year from $1.03 reported in the prior-year quarter. Our estimate for fiscal fourth-quarter 2022 EPS was $1.09.

The online auto auction leader generated revenues of $883.4 million, beating the Zacks Consensus Estimate of $873 million. The top line also increased 18% from the year-ago reported figure of $748.6 million. Our estimate for the top line was $887.3 million.

Copart, Inc. Price, Consensus and EPS Surprise

Copart, Inc. Price, Consensus and EPS Surprise

Copart, Inc. price-consensus-eps-surprise-chart | Copart, Inc. Quote

Segmental Performance

Fiscal fourth-quarter service revenues came in at $707.8 million, up from $620 million recorded in the year-earlier period. Service revenues accounted for 80.1% of the total revenues. The figure missed the consensus mark of $738 million.Our estimate was $750.1 million.

Vehicle sales totaled $175.5 million in the quarter, up from the prior-year level of $128.5 million. The figure exceeded the consensus mark of $171 million. Our estimate was $137.3 million.

Financial Position

Gross profit was up 6.7% year over year to $381.6 million. Total operating expenses flared up 25% to $558.6 million. General and administrative expenses jumped 55.1% from the prior-year quarter to $43.2 million. Operating income, however, increased to $325 million from $301.5 million recorded in the year-ago quarter. Net income inched up 3% year over year to $263.7 million.

Copart had cash and cash equivalents of $1,384.2 million as of Jul 31, 2022, compared with $1,048.3 million as of Jul 31, 2021. Long-term debt reduced to $1.9 million at the end of the reported quarter from $397.6 million as of Jul 31, 2021.

CPRT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Releases

Copart’s peers include KAR Auctions Services Inc. KAR and Insurance Auto Auctions, aka IAA, Inc. IAA.

KAR Auctions reported fiscal second-quarter 2022 results on Aug 2. It incurred an adjusted loss of 4 cents a share, which widened from 3 cents a share in the year-ago period. The Zacks Consensus Estimate for second-quarter 2022 earnings was pegged at 8 cents a share. Revenues of $384 million rose 2% year over year and came ahead of the consensus mark of $376 million.

During the quarter, KAR completed the sale of its ADESA U.S. physical auction business to Carvana. The proceeds from the transaction are being used to reduce debt. KAR exited the quarter with $804 million of cash and cash equivalents. It bought back shares worth $82 million in the second quarter.

Insurance Auto reported second-quarter 2022 results on Aug 9. It posted adjusted earnings of 62 cents a share, topping the Zacks Consensus Estimate of 55 cents. The bottom line, however, deteriorated from earnings of 69 cents in the year-ago period.  Revenues of $520.3 million rose 16.9% year over year but fell short of the consensus mark of $523 million.

This Illinois-based auto auction company envisions fiscal 2022 revenues in the band of $2.02-$2.075 billion. Total adjusted EBITDA is forecast between $540 million and $560 million. Insurance Auto exited the quarter with cash and cash equivalents of $137.6 million.

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