Auto dealership group CarMax Inc. (KMX) on Wednesday posted higher quarterly profit on strong used-car sales but said rising gasoline prices and interest rates could hurt spring business, sending its shares down 5 percent.

The company forecast earnings in the current quarter at the lower end of Wall Street estimates, and President and Chief Executive Austin Ligon said some of the factors that hurt sales a year ago are still present.

"Gas prices are rising once again; interest rates continue to increase; wholesale prices are again rising in the spring more than historical norms would indicate; and domestic auto manufacturers are struggling, which makes their incentive behavior difficult to anticipate," Ligon said in a statement.

The Richmond, Va.-based company said net income for the fiscal fourth quarter ended Feb. 28 rose 32 percent, to $29.7 million, or 28 cents a share, from $22.5 million, or 21 cents a share, a year earlier.

Analysts, on average, had forecast 28 cents a share, according to Reuters Estimates.

CarMax raised it earnings forecast for the fourth quarter twice, based on better-than-expected February sales. Sales in the quarter rose to $1.4 billion from $1.12 billion a year earlier.

CarMax said sales received a boost from its recently introduced subprime lending (search) program, aimed at buyers with blemished or limited credit histories and which typically carries a higher interest rate.

The used-car retailer said it expects fiscal 2006 earnings of $1.20 to $1.30 a share, and first-quarter earnings of 35 cents to 38 cents a share.

Analysts, on average, expect $1.25 per share for 2006 and 38 cents for the first quarter, according to Reuters Estimates.

Shares of CarMax were down $1.86 to $31.34 on the New York Stock Exchange (search).