For Immediate Release
Chicago, IL – September 23, 2010 – Zacks.com Analyst Blog features:Deutsche Bank AG (DB), UBS AG (UBS), Credit Suisse Group (CS), HSBC Holdings plc (HBC) and CarMax Inc. (KMX ).
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Here are highlights from Wednesday’s Analyst Blog:
Deutsche Bank Expects 3Q Loss
Deutsche Bank AG (DB) expects a loss in the third quarter of 2010. This is due to a €2.3 billion ($3 billion) charge from the revaluation of the company’s stake in Deutsche Postbank, which the company agreed to purchase in 2008. Weak market conditions during the third quarter have added to its woes.
Deutsche Bank’s corporate-banking and securities business, which is generally a strong contributor of its revenue, has suffered seasonal reductions, threatening a fall in performance from the year-ago quarter levels. Additionally, the company’s asset and wealth management division has also worsened during the current year’s third quarter.
These revelations came as the company filed a prospectus for its €10.2 billion share sale. Deutsche Bank intends to use this for bolstering capital levels in order to comply with regulatory requirements and support its Postbank takeover.
Regardless of third quarter loss expectations, the company claimed to be progressing well to meet its target of €10 billion in pre-tax profit in 2011. Beginning in 2011, it also expects around €1 billion in synergies from its Postbank takeover.
Shares of Deutsche Bank were down 2.72% during Tuesday’s regular trading session on the New York Stock Exchange. The negative sentiment over the poorer market conditions during the third quarter that Deutsche referred to also led to a fall in the stock price of its rivals such as UBS AG (UBS), Credit Suisse Group (CS) and HSBC Holdings plc (HBC), which were down 1.20%, 1.71% and 0.89%, respectively, during Tuesday’s regular trading session.
CarMax Beats on Used Vehicle Sales
CarMax Inc. (KMX ) showed a profit of $107.9 million or 48 cents per share in the second quarter of its fiscal 2011, beating the Zacks Consensus Estimate of 40 cents per share. The profit was slightly higher than $103 million or 46 cents per share in the prior-year quarter. The improvement in profit was primarily driven by increases in Used vehicle sales and Wholesale vehicle sales.
Net sales and operating revenues in the quarter went up 13% to $2.34 billion, higher than the Zacks Consensus Estimate of $2.28 billion. Comparable-store used unit sales in the quarter rose 4%, driven by an improvement in sales conversion.
Used vehicle sales appreciated 10.7% to $1.89 billion. This can be attributable to a higher percentage of vehicles sourced directly from consumers through the company’s vehicle appraisal process and strong wholesale market valuations, which was higher than the prior-year levels.
However, new vehicle sales dipped 19.2% to $51.1 million, reflecting lower confidence in consumer spending. Wholesale vehicle sales scaled up 39.2% to $329.9 million, driven by increase in appraisal traffic as well as appraisal buy rate.
Other sales and revenues rose marginally by 2.1% to $71.3 million, mainly driven by increases in extended service plan revenues, partially offset by a decrease in third-party finance fees.
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