Copart Misses Q3 Earnings Ests, Up Y/Y - Analyst Blog

Copart, Inc. CPRT reported earnings per share EPS of 46 cents for third-quarter fiscal 2014 (ended Apr 30, 2014), up from 38 cents in the corresponding quarter last year. However, the EPS lagged the Zacks Consensus Estimate of 47 cents by a narrow margin.

The reported quarter's earnings exclude an impairment charge of $29.1 million, while the prior-year quarter excludes the impact of Hurricane Sandy. Including these items, net income (on a reported basis) amounted to $40.9 million, down 23.2% over the prior-year quarter.

Copart's revenues went up 11.6% to $309.7 million in the quarter, nominally beating the Zacks Consensus Estimate of $309 million. Service revenues augmented 13.9% to $255 million and revenues from vehicle sales went up 1.9% to $54.7 million.

Gross margins increased 14.4% to $132.3 million (42.7% of sales) from $115.6 million (or 41.6%) in the year-ago quarter. General and administrative expenses went up 24.7% to $35.9 million from $28.8 million in the year-ago quarter.

Operating income plunged 24.4% to $62.6 million from $82.8 million recorded in the third quarter of fiscal 2013. Operating margin was 20.2% compared with 29.8% in the year-ago quarter.

Financial Details

Copart had cash and cash equivalents of $132.8 million as of Apr 30, 2014 versus $63.6 million as of Jul 31, 2013. Total debt and capital lease obligations amounted to $318.3 million as of Apr 30, 2014 compared with $372.5 million as of Jul 31, 2013.

During the first nine months of fiscal 2014, the company generated net cash flow of $207.6 million from operations compared with $183 million in the same period a year ago. Capital spending was $74.8 million compared with $140 million in the first nine months of fiscal 2013.

Copart is a prominent player in online auctions and vehicle remarketing services in the U.S., Canada, U.K. and U.A.E. along with Sotheby's BID, Ritchie Bros. Auctioneers Incorporated RBA and Liquidity Services, Inc. LQDT. The company provides a wide range of remarketing services to vehicle suppliers, primarily insurance companies, to process and sell salvage vehicles mainly over the Internet through the company's Virtual Bidding Internet auction-style sales technology.

Currently, Copart carries a Zacks Rank #3 (Hold).