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Used-car retailer Carvana sees significant core earnings for 2023 -Breaking

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© Reuters. FILEPHOTO: Carvana dealers display vehicles. They allow customers to purchase a car online. Picture taken March 9, 2017. REUTERS/Brian Snyd

(Reuters) – Carvana Co (NYSE 🙂 forecasts significant core earnings in 2023 as the online dealer of used automobiles outlines plans to cut back on spending for advertising, expansion, and other areas that will offset declining demand.

After the bell, shares in the company which are well-known for their car vending machine machines rose by 12.9%.

Carvana had just announced it was going to lay off approximately 2,500 people, or 12 percent of its workforce as part of efforts to get back to profitability after a poor quarterly performance.

Due to skyrocketing prices and shortages of supply, the demand for used cars is down. Carvana stated that it didn’t see seasonal demand in the first quarter.

Carvana recorded $220m in capital expenditures for its first quarter. It plans to reduce its budget each quarter until it is at $50 million in the fourth quarter. The company plans to maintain that number each quarter so that it can post “significantly positive” EBITDA in 2023.

It also stated that it will reduce the company’s selling, general, and administrative expenses per vehicle sold. The company said they would maintain an equal balance between sales volume and employee levels.

Carvana’s equity offering raised $1.25 Billion last month. However, its shares have lost more than half of their value.

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