A glass tower of Carvana is lit up on February 23, 2022, in Oak Brook, Illinois.

Armando L. Sanchez | Tribune News Service | Getty Images

Shares of online used car retailer Carvana rose on Thursday after the company said its second-quarter results were likely to beat its earlier forecasts as cost-cutting measures were in place.

Shares are up 56% during the trading session.

The company said it now expects to report adjusted earnings before interest, tax, depreciation, and amortization, or EBITDA, of more than $50 million in the second quarter of 2023. Wall Street analysts surveyed by FactSet predicted the company would roughly break even on that. Basis.

Carvana said it also expects its gross profit per unit, or GPU, to be above $6,000 in the second quarter. This would be a new company record and an increase of more than 60% over the second quarter of 2022.

The company reported a graphics processing unit (GPU) value of $4,303 in the first quarter of 2023, up 52% ​​from the previous year.

Carvana’s latest guidance in May called for a positive adjusted EBITDA and adjusted gross profit per unit of $5,000 in the second quarter.

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Shares of Carvana rose Thursday after the company boosted its guidance for the second quarter.

Shares of the company have enjoyed a strong rally during the pandemic as buyers have turned to online sources for used cars. The company borrowed heavily to keep up with demand — but found itself in a sharp hole last year, as interest rates began to rise and used car prices plummeted. It responded with vigorous cost-cutting efforts.

Carvana stock fell about 98% in 2022 but has regained significant gains in recent months: As of Thursday’s close, it is up more than 400% since the start of 2023.

“The team’s continued focus on increasing profitability has resulted in significant savings and efficiencies, and this work will continue as we continue to execute our plan,” CEO Ernie Garcia said in a statement Thursday. “Our progress continues to positively impact the business faster than expected.”


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