Carvana, a used car reseller, declared its first profit and anticipated core current-quarter earnings “far above” $100 million on Thursday, thanks partly to cost cuts, driving its shares up more than 20% after hours. Carvana has reduced inventory advertising and other costs to strengthen its balance sheet and achieve positive cash flow.
The company, which allows consumers to buy automobiles online, gained popularity during the COVID-19 epidemic when people preferred readily available secondhand cars over modern vehicles, which were in short supply owing to a global chip crunch.
Carvana forecasts retail units sold in the first quarter of 2024 to be “somewhat higher” than last year. CEO Ernie Garcia stated that the company was on track to meet its objective of “being the largest and most profitable automobile retailer.”
Carvana estimates first-quarter retail gross profit per unit to be comparable to the fourth quarter, with growth potential. Carvana also stated that it aims to cut expenses per retail unit sold sequentially from $5,769 in the fourth quarter.
The corporation reported a net income of $450 million for 2023. It reported a loss of $1.59 billion in 2022.
