AutoNation Revs Up After Earnings Beat Estimate

AutoNation shares were higher after the car dealer reported better-than-expected third-quarter earnings.
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Shares of AutoNation  (AN) - Get Report were higher after the car dealer reported better-than-expected third-quarter results along with a strong outlook.

The automotive retailer also said it would spend $500 million buying back shares.

AutoNation's stock at last check was up 3.1% to $64.97.

The Fort Lauderdale, Fla., company posted earnings of $2.05 per share, up 86% from $1.10 a share in the year-earlier quarter. The latest figure came in ahead of the $1.72-a-share forecast by analysts surveyed by FactSet.

Earnings from continuing operations in the latest period were $2.05 a share. They included charges of 31 cents to close the collision-parts business and 2 cents on its investment in Vroom. Adjusted earnings from continuing operations were $2.38 a share.

Vroom is the New York car dealer enabling consumers to finance and buy vehicles online and have them delivered.

Revenue slipped 1% to $5.4 billion from $5.46 billion in the year-earlier period. Analysts polled by FactSet had been expecting $5.19 billion.

Gross profit per vehicle climbed $966, or 28%, compared to the year-ago period.

"During the third quarter, AutoNation continued to leverage its digital capabilities to drive cost reductions and increased efficiency," the company said in a statement.

"These efforts, combined with strong gross-profit growth, drove significant SG&A leverage in the quarter." 

Selling, general and administrative expense fell 1.9% to $641.4 million from $653.8 million.

AutoNation plans to open more than 100 vehicle stores in the U.S., with more than 50 completed by the end of 2025, the company said. 

"The first phase of the AutoNation USA store expansion will include extending AutoNation's coast-to-coast footprint into new markets," it said. "The company plans to open five new AutoNation USA stores by the end of 2021."

AutoNation has a long-term goal of retailing more than 1 million combined new and used vehicle units per year.

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