Why AutoNation (AN) Spiked on Thursday

NEW YORK (TheStreet) -- AutoNation (AN) was trading higher on Thursday on the back of higher-than-expected quarterly earnings. By early afternoon, shares had spiked 6.3% to $49.98.

Over its December-ended quarter, the auto retailer posted net income up 24% to 83 cents a share, a record high. Revenue was 7.6% higher year-over-year to $4.52 billion. Analysts surveyed by Thomson Reuters expected earnings of 76 cents a share on $4.59 billion in revenue.

The company's retail new vehicle unit sales increased 1% on a same-store basis, 5% overall, while retail used vehicle sales increased 10% on a same-store basis, 15% overall.

The Fort Lauderdale-based business said for the full year it saw net profit of $2.98 a share, a nickel over consensus, while revenue of $17.52 billion fell short of estimates for $17.56 billion.

The board authorized the repurchase of up to an additional $250 million worth of common stock. AutoNation now has a total pool of $405 million authorized for share repurchase.

TheStreet Ratings team rates AUTONATION INC as a Buy with a ratings score of A-. The team has this to say about their recommendation:

"We rate AUTONATION INC (AN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, growth in earnings per share, increase in stock price during the past year and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

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