Why KAR Auction Services Stock Tanked 25% at the Open Today
Shares of KAR Auction Services (NYSE: KAR), which provides a host of services to the auto sector, fell out of bed in the first 30 minutes of the trading day on Feb. 17, dropping as much as 25% in early trading. The big news, quarterly earnings, came out after the close on Feb. 16. Investors were very clearly displeased and showed it by selling the stock.
In the fourth quarter of 2020 KAR Auction Services saw revenue of $530 million, down 21% from the $671 million in the same period of 2019. Worse, the company's adjusted earnings came in at a loss of $0.01 per share in the final stanza of 2020 compared to a profit of $0.19 per share the prior year. Analysts, meanwhile, had been calling for earnings of $0.28 per share. That's a sizable miss, with the company basically laying the blame on the coronavirus pandemic. Full-year results were equally troubling, with revenue off by 20% and adjusted earnings declining roughly 50%.
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Source Fool.com
