FORT LAUDERDALE, Fla. (AP) -- A late-March surge in car and truck buying helped dealership group AutoNation Inc. overcome subzero temperatures and waves of winter storms earlier in the year to post nearly a 15 percent increase in first-quarter net income.
The country's largest dealership chain with 270 franchises said it earned $95.1 million, or 78 cents per share, from January through March. That compares with $83 million, or 67 cents per share, a year earlier. Revenue grew 6.5 percent to $4.36 billion.
The news sent AutoNation shares up $1.77, or 3.3 percent, to $55.66 in morning trading after hitting what FactSet says is an all-time high of $56.10 earlier in the day.
CEO Mike Jackson said in an interview that the country was in an epic deep freeze during the first 10 weeks of the year, and consumers were in hibernation. He remembered looking at Chief Operating Officer Mike Marone and wondering if people would ever return to showrooms. But they did, in a big way.
"The last two weeks of March were absolutely phenomenal, and we've seen that level of intensity continuing into the beginning of the second quarter, in April," said Jackson, who is confident that total U.S. auto sales will exceed 16 million this year despite the slow start.
Excluding a $5 million gain from disposing of businesses and properties, the Fort Lauderdale, Fla.-based AutoNation company earned 75 cents per share from continuing operations. That beat Wall Street estimates of 73 cents. Revenue also was ahead of Wall Street. Analysts polled by data provider FactSet expected $4.32 billion.
The company's retail vehicle sales rose 5 percent for the quarter, and AutoNation still expects 3 percent to 5 percent U.S. industry growth this year for an annual selling rate of 16 million.
Jackson said in a statement that the company's earnings were driven by strong performance in all business sectors. New vehicle revenue rose 7.5 percent to $2.4 billion, while used vehicle sales revenue was up 4 percent to just over $1 billion. Parts and service revenue rose about 5 percent to $671 million, and finance and insurance revenue was up 11 percent to $172.4 million.
New vehicle unit sales increased rose 6 percent, or 4 percent at stores open at least a year, the company said.
Income from selling Detroit-based brands rose 9 percent to $64 million for the quarter, AutoNation said, while income from imported brands fell 8 percent to $65 million. But premium luxury income leaped 21 percent to $83 million.
Detroit companies are gaining market share because of rising truck sales, where they are stronger than the Japanese companies, Jackson said.
He attributed the growth in luxury sales to an uneven economic recovery that has supported the sale of goods from luxury manufacturers. Brands like Mercedes, Audi and BMW are selling at the high end of the market, but they're also moving into mainstream price ranges with new offerings, he said.
Stifel analyst James Albertine, in a note to investors, said he expected more pressure on AutoNation's sales because of winter storms. He said the company had a very solid quarter given the weather and macroeconomic issues.