CarGurus' stock leaps 6% on earnings beat, deal to buy CarOffer

Shares of CarGurus Inc. (CARG) rose more than 6% in the extended session Tuesday after the online car marketplace reported third-quarter results that were above Wall Street expectations. CarGurus earned $22.3 million, or 17 cents a share, in the quarter, compared with $107 million, or 14 cents a share, in the year-ago quarter. Adjusted for one-time items, the company earned 34 cents a share. Revenue dropped 49% to $219.4 million. Analysts polled by FactSet expected CarGurus to report adjusted earnings of 26 cents a share on sales of $216 million. CarGurus guided for sales between $899 million and $919 million for 2023, and between $208 million and $228 million for the fourth quarter. It called for EPS of $1.19 to $1.22 for the year, and of 30 cents to 33 cents for the fourth quarter. "We are excited by the trajectory of our platform and rapid innovation," Chief Executive Jason Trevisan said in a statement. CarGurus said its board has authorized a $250 million share buyback program, "which underscores our commitment to using our strong cash flow to enhance shareholder value." Separately, the company said it planned to buy the remaining minority equity interests in online car-selling platform CarOffer for $75 million in an all-cash deal, expected to close in December. CarGurus bought a 51% stake in CarOffer in 2021, with the ability to buy the remaining equity interest over the next three years.

-Claudia Assis

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11-07-23 1739ET

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