Autonation Inc Earnings: Profitable Quarter Accelerates Growth

Wall St. Cheat Sheet

S&P 500 component Autonation Inc reported net income above Wall Street’s expectations for the fourth quarter. AutoNation offers a range of automotive products and services, including new and used vehicles, parts and automotive repair, and maintenance services, as well as automotive finance and insurance products.

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Autonation Inc Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for Autonation Inc rose to $70 million (50 cents per share) vs. $67.3 million (44 cents per share) in the same quarter a year earlier. This marks a rise of 4% from the year earlier quarter.

Revenue: Rose 13.3% to $3.68 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: AN reported adjusted net income of 51 cents per share. By that measure, the company beat the mean estimate of 48 cents per share. It beat the average revenue estimate of $3.52 billion.

Quoting Management: Mike Jackson, Chairman and Chief Executive Officer, said, “We continued to deliver impressive results, setting another record for the highest ever annual and quarterly adjusted EPS from continuing operations. We are pleased with our strong year-over-year growth across all areas of our business.” Mr. Jackson concluded, “We are looking forward to the continued recovery in auto retail, buoyed by accelerated product offerings, robust consumer credit and strong replacement demand. We expect industry new vehicle sales to be approximately 14 million units in 2012.”

Key Stats:

The company has now seen net income rise in three straight quarters. In the third quarter, net income rose 24.3% and in the second quarter, the figure rose 52.3%.

Gross margin shrank one percentage points to 15.7%. The contraction appeared to be driven by increased costs, which rose 14.7% from the year earlier quarter while revenue rose 13.3%.

Revenue has risen the past four quarters. Revenue increased 6.7% to $3.49 billion in the third quarter. The figure rose 7.3% in the second quarter from the year earlier and climbed 16.3% in the first quarter from the year-ago quarter.

The company beat estimates last quarter after being in line with expectations in the third quarter with net income of 48 cents per share.

Looking Forward: The outlook for the company’s next quarter performance is unfavorable. Estimates have gone down from an average 50 cents per share to 49 cents over the past seven days. The average estimate for the fiscal year has remained at $1.91 per share.

Competitors to Watch: Penske Automotive Group, Inc. , Group one Automotive, Inc. , Sonic Automotive, Inc. , CarMax, Inc , Asbury Automotive Group, Inc. , Copart, Inc. , Lentuo Intl. Inc , Lithia Motors, Inc. , AutoChina Intl. Ltd. , and America’s Car-Mart, Inc. .

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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