Shares of Carvana Co. rallied 25% in the aftermarket Thursday after the online used-car company narrowed a quarterly loss and said it expects to reach positive adjusted EBITDA in the current quarter. Carvana
CVNA,
+1.84%
lost $286 million, or $1.51 a share, in the first quarter, compared with a loss of $506 million, or $2.89 a share, in the year-ago quarter. Revenue dropped 25% to $2.61 billion but was at the top of a previous guidance range.
FactSet consensus called for a loss of $2.03 a share on sales of $2.64 billion. The company said it hopes to achieve positive adjusted EBITDA in the second quarter. It has been a “difficult macroeconomic and industry environment” and the business has faced “a tremendous amount of change,” Carvana said in a letter to shareholders. The company continued to cut down on inventory, but not too much as to reduce choice for consumers, and reduce advertising spending. Sales volumes faced “a headwind” from rising interest rates, the company said. Carvana shares rallied earlier this week, bouncing off last week’s multiweek lows, after Bloomberg, citing people familiar with the situation, reported that creditors holding about 90% of the company’s bonds have proposed ways to cut debt and improve liquidity. Wall Street has called a potential debt-for-equity swap, one of the proposals reportedly on the table, a “lifeline” for the company. Carvana in March launched a bond swap to try to shore up its balance sheet. In a separate press release Thursday, Carvana extended the …
Article Attribution | Read More at Article Source