Carvana Co shares climbed 13% to $8.95 on Wednesday after the e-commerce platform for buying and selling used cars said it expects a first quarter loss of between $50 million and $100 million, compared with a loss of $348 million during the same period last year, even as the company experiences significantly lower sales.
Carvana also revealed plans to restructure some of its $9 billion debt load, offering noteholders the option to exchange their unsecured notes at a premium to current trading prices in exchange for new secured notes.
The company noted the move would reduce its cash interest expense, saving about $100 million per year.
Carvana added that it expects 1Q retail units sold to be between 76,000 and 79,000, compared with 105,185 a year ago, on net sales and operating revenues of between $2.4 billion and $2.6 billion, down from $3.5 billion a year earlier.
Shares of Carvana have more than doubled in value this year, rebounding after last year’s operations and earnings fell short of analyst expectations.
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