AutoNation 3Q profit up 13 percent

AutoNation 3rd-quarter profit rises 13 percent but falls short of analyst estimates

Associated Press

FORT LAUDERDALE, Fla. (AP) -- AutoNation, the country's largest car dealership chain, rode the U.S. auto sales recovery to a 13 percent net profit increase in the third quarter.

The Fort Lauderdale, Fla., company said Thursday that it earned $92.6 million, or 75 cents per share, compared with $81.6 million, or 66 cents per share, a year ago. Revenue rose almost 14 percent to $4.47 billion.

But the earnings fell short of Wall Street's expectations. Analysts polled by data provider FactSet expected earnings of 77 cents per share on revenue of $4.44 billion.

Shares of AutoNation Inc. slipped 58 cents to $47.99 in morning trading.

All of AutoNation's business units — new and used car sales, parts and service, and finance and insurance — reported increased revenue for the quarter, the company said in a statement.

"The auto sales recovery has continued to build momentum," Chief Financial Officer Mike Short said in remarks prepared for a conference call with analysts and reporters.

U.S. sales ran at an annual rate of about 15.4 million during the first nine months of the year, and AutoNation said it expects the market will finish the year in the mid-15 million sales range. That's up from 14.5 million last year and far higher than 10.4 million in 2009, a 30-year low.

New vehicle sales for the 267-franchise chain rose 13 percent overall and 8 percent at stores open at least a year. Used car and truck sales were up 15 percent overall and 11 percent at stores open at least a year.

Income from dealers that sell vehicles made by Detroit-based automakers rose 24 percent to $64 million. Income from stores selling foreign brands rose 5 percent to $73 million, the company said. Premium luxury dealer income rose 18 percent to $74 million for the quarter.

The company also announced that it has acquired O'Hare Honda and O'Hare Hyundai dealerships in the Chicago metro area. No purchase price was disclosed, but AutoNation said the stores generate $85 million in annual retail sales, selling 3,100 new and used vehicles per year. The deal is expected to close by year-end.

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