AutoNation (AN) - Get Report climbed Tuesday after beating Wall Street's first-quarter expectations, but the CEO of the nation's largest car-dealer chain warned that the current worldwide semiconductor shortage could drag on for as long as a year.
"Demand continues to exceed supply for new vehicles, and we expect this to continue throughout 2021, in part due to the production disruption," CEO Mike Jackson said, according to Reuters.
Shares of the Fort Lauderdale, Fla. were down 0.15% to $97.42 in trading Tuesday.
AutoNation reported net income of $239.4 million, or $2.85 a share, compared with a loss of $232.3 million, or $2.58 a share, a year ago. The results included a gain of 7 cents a share from the sale of AutoNation's remaining stake in Vroom.
Adjusted earnings came to a record $2.79 share, up 207% from 91 cents a year ago, the company said. Analysts expected adjusted profit of $1.85 a share.
Revenue totaled $5.9 billion, compared with $4.67 billion a year ago, and beat the FactSet consensus for $5.03 billion.
Same-store revenue came to $5.9 billion, up 27% from a year ago. New vehicle same-store sales rose 22%, while used vehicle same-store sales climbed 28%.
AutoNation said it remains on track to open five new AutoNation USA stores in 2021 and 12 additional new stores in 2022.
Jackson said in an interview with Bloomberg that he expects the industry’s vehicle shipments in the second quarter to be double what they were a year ago, but that’s barely enough to keep dealer lots full.
Jackson said the supply chain is "fragile and disrupted because of the chip shortages and still dealing with the pandemic."
“I see it continuing for at least the next year, the extraordinary demand, and I see no resolution on the microchip side for six to nine months, or a year," he said.
AutoNation also reported better-than-expected earnings in February.