Investors have been paying a lot of attention to macroeconomic data lately, and Wednesday morning’s release of March inflation data has become central to the stock market’s future direction. Investors remained in wait-and-see mode on Tuesday morning with stock index futures little changed in the run-up to the opening of trading at 9:30 AM ET.

Beyond economic data, though, the impending start of first-quarter earnings season is also awaiting its place in the spotlight. Carmax (KMX 9.14%) And Adtran (ADTN 1.41%) The two stocks moved in opposite directions as investors gave some information about how their respective quarters went, and in response to shareholders. Below, you’ll see how the two companies are faring and what that could mean for the earnings release later this week.

Carmax hits the gas

Shares of CarMax rose 6% in premarket trading on Tuesday morning. Most used vehicle retailers reported fourth-quarter financial results for the period ending Feb. 28, and while they weren’t exactly strong, they were slightly better than many had feared.

CarMax’s financial numbers have shown a pullback after extremely strong years in the recent past. Revenue of $5.7 billion fell 26% year over year as the car retailer closed the fiscal year with a 7% decline in annual sales. CarMax saw pressure in both its retail and wholesale operations, as retail unit sales fell 13% and wholesale units fell 19%. Quarterly earnings per share of $0.44 fell by more than half from the prior year.

However, investors were happy to see signs of recovery in profit margins. On the retail side, gross profit per unit sold came in at $2,277, up $82 from the period 12 months ago. For its wholesale business, gross profit was relatively flat at $1,187 per unit.

Furthermore, CarMax is optimistic that it will be able to sell 2 million to 2.4 million vehicles by 2026 and generate $33 billion to $45 billion in revenue by 2026. Heading into late calendar 2025, investors in CarMax wonder if the stock can continue to rally from current levels despite the struggles of other dealers.

Adtran falls short

Elsewhere, shares of Adtran plunged more than 20% in premarket trading. The networking and communications solutions provider reported preliminary results for the first quarter that were slightly lower than it had previously projected.

Adtran said it believes first-quarter revenue will be between $322 million and $326 million. This is significantly lower than the $355 million to $375 million range previously provided. Adtran attributed the shortfall to customer inventory adjustments that had a direct impact on its customer solutions product line. In addition, Adtran faced supply constraints that prevented it from producing as many products as customers wanted.

Additionally, CEO Tom Stanton said oversupply of equipment intended for installation at customer premises could continue into the second quarter. Executives are optimistic that these impacts will be temporary and will improve in the quarter, but Adtran expects to make some cost adjustments to adapt to current conditions.

Adtran expects long-term opportunities to take advantage of ongoing fiber network upgrades worldwide remain intact. However, investors are not content to deal with a negative operating margin during a difficult period for the industry.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool features and recommends Carmax. Motley Fool has a revealing policy.

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