Carvana stock opens about 10% up after first-ever quarterly profit

Carvana Co. (NYSE: CVNA) turned profitable for the first time in its fiscal second quarter. Shares of the company are about 5% up on Friday morning after it reported better-than-expected results for Q2 last night.

Second-quarter financial performance

Carvana reported $45 million of earnings in the second quarter that translates to 26 cents per share. In the comparable quarter of last year, it had posted $106 million of loss or 62 cents per share. The online used car retailer generated $3.3 billion of sales that represent an annualised growth of 198%.

Are you looking for fast-news, hot-tips and market analysis?

Sign-up for the Invezz newsletter, today.

According to FactSet, experts had forecast $2.46 billion of revenue and 39 cents of per-share loss. Carvana sold 107,815 vehicles in the recent quarter to retail customers – a close to 100% year over year increase.

As per the CEO, it was a “landmark quarter” for Carvana that continues to see “exceptional demand” for used cars.

Highlights from CEO Garcia’s interview with CNBC’s “Squawk Box”

In his interview with CNBC, CEO Ernie Garcia said this year looks pretty much the same as 2019 in terms of volumes. He acknowledged that the company benefited from the COVID-driven disruptions in the supply chain that pushed automakers into producing fewer new cars.

While Garcia finds it difficult to give the particulars about the future because of the new COVID waves showing up in different parts of the world, he said on “Squawk Box”:

“We stay focused on delivering great customer experience, making sure that we build a business that has access to more variable revenue than the rest of the industry and keeping our costs down. If we do that, I think, in the long run, it’s all going to work out.”

The United States’ fastest growing used car dealer now has a market cap of $59 billion – much bigger than that of AutoNation, Carmax, and Penske Automotive, combined.