KAR Auction Services Inc. saw profit and revenue soar in the fourth quarter, topping Wall Street expectations in both categories.
The Carmel-based vehicle auctioneer on Tuesday reported profit of $172.8 million, or $1.27 per share—up 280 percent over the profit of $45.5 million, or 33 cents per share, it reported for the fourth quarter of 2016.
Earnings, adjusted for one-time gains and costs, were 63 cents per share. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of 52 cents per share.
KAR reported revenue of $890.4 million for the quarter, compared with $813.7 million for same period of 2016, an increase of 9 percent. Four analysts surveyed by Zacks expected revenue of $885.5 million.
For the year, the company reported revenue of $3.46 billion, a 10 percent increase over 2016. Profit for 2017 was $362 million, or $2.62 per share, an increase of 63 percent.
KAR said profit was favorably impacted by the enactment of the Tax Cuts and Jobs Act of 2017 in the fourth quarter.
“The major provisions affecting the company include a reduction in our federal income tax rate, the immediate expensing of certain capital expenditures and a reduced deduction for certain executive compensation,” the company said. “The impact of these changes, if they had applied to 2017, would have been a reduction in cash taxes of over $40 million and an increase in earnings per share of 30 cents.”
KAR CEO Jim Hallett, in a conference call Wednesday, said all business lines “performed well,” with online sales driving increased volume.
KAR said it expects full-year earnings in the range of $2.89 to $3.04 per share.
Shares in KAR were up 1.7 percent Wednesday morning, to $51.34 each.