Welcome to the Daily 5 report for Thursday, April 10.
We’re probably preaching to the automotive choir here, but CarMax’s latest quarterly report today illustrates the ongoing divide between reality and Wall Street.
As our Mark Hollmer and other news outlets reported, CarMax generated impressive net income of $80 million during the fiscal quarter that ended Feb. 28 — a 79 percent boost. Revenue rose 6.7 percent to $6 billion.
That’s good, right? Not to Wall Street, which bludgeoned CarMax shares down by 17 percent during another volatile day for stock markets.
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CarMax’s adjusted earnings per share missed Wall Street analyst expectations by a whole penny. But worse, given the volatility in the economy caused by tariffs and other headwinds, CarMax elected to stop issuing “guidance” for future results, which is a big no-no to analysts charged with telling clients whether to buy, sell or hold a stock.
CEO Bill Nash defended the decision with this unusual thing called common sense.
“Why put a target out there that’s really speculative, not knowing exactly where this environment is going to go? We just think that’s the prudent thing,” Nash said. “But it does not take the focus on what we’re going after and those targets. It just doesn’t make sense to put a range on them at this point.”
In other news today, General Motors is laying off workers at its all-electric Factory Zero plant in Detroit where it is adjusting production “to align with market dynamics,” Reuters reported, citing a GM statement. About 200 workers at the plant will be temporarily laid off, a company source told Reuters. The move is not related to recently imposed auto tariffs, according to the source.
Canada’s Magna International Inc. said this month it is opening a new headquarters in Shanghai to handle its burgeoning China business — just in time for the emerging trade war between the U.S. and China. The new office building, in Shanghai’s Changning district, spans 107,639 square feet of floor space and will host more than 700 employees, China correspondent Yang Jian reports.
China business has been booming for the world’s third-largest auto supplier. China revenue increased 15 percent in 2024, the company has said without revealing the exact figure. Magna said some 60 percent of its 2024 revenue in China was generated by sales to Chinese automakers.
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Finally, we’re starting to see the U.S. impact of that Chinese trade war. According to this scoop today from Urvaksh Karkaria, Volvo Cars plans to halt U.S. sales of the S90 large sedan it builds in China. The automaker also is reacting to the Trump administration’s tariffs on imported vehicles by reducing incentives on inventory already at U.S. dealerships and exploring higher production at its assembly plant in South Carolina, the story says.
A person familiar with Volvo’s plans told Karkaria that the automaker is expected to cancel U.S. orders of the S90 next year. Volvo sold 1,364 of the S90 here in 2024.
That’s it for now. Have a great rest of your day.
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— Philip Nussel, online editor
