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AutoNation (AN) Q1 Earnings & Revenues Top, Improve Y/Y

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AutoNation Inc. AN reported adjusted earnings of $1.01 per share in first-quarter 2018, surpassing the Zacks Consensus Estimate of $1. The reported figure surpassed 97 cents recorded in first-quarter 2017.

Net income from continuing operations was $93 million compared with $98 million in first-quarter 2018.

During the quarter under review, AutoNation reported revenues of $5.26 billion, rising 2% year over year. Also, the top line beat the Zacks Consensus Estimate of $5.25 billion.

AutoNation, Inc. Price, Consensus and EPS Surprise

AutoNation, Inc. Price, Consensus and EPS Surprise | AutoNation, Inc. Quote

New vehicle revenues increased 1.4% year over year to $2.76 billion in first-quarter 2018. Used-vehicle revenues rose 7.5% year over year to $1.3 billion. Parts and service business revenues grew 2.2% year over year to $842 million during the reported quarter. Net revenues from finance and insurance business were $238 million, reflecting a 9.6% increase.

Segment Details

Revenues at the Domestic segment — comprising stores that sell vehicles manufactured by General Motors, Ford and FCA US — declined 1.5% to $1.77 billion. The segment’s income declined 2% to $60 million in the quarter under review.

Revenues at the Import segment — consisting of outlets that sell vehicles manufactured primarily by Toyota, Honda, Nissan and Hyundai — increased 1.3% to $1.65 billion. However, segment income gained 2% to $73 million in the reported quarter.

Revenues at the Premium Luxury segment retail vehicles manufactured, primarily by Mercedes-Benz, BMW, Lexus and Audi. The sales figure rose 6.3% to $1.72 billion. Segmental income grew 9% to $88 million in the reported quarter.

Balance Sheet and Capex

AutoNation’s cash and cash equivalents were $57.5 million as of Mar 31, 2018, declining from $69.2 million as of Dec 31, 2017. The company’s inventory was valued at $3.5 billion as of Mar 31, 2018, compared with $3.37 billion as of Dec 31, 2017.

As of Mar 31, 2018, the non-vehicle debt was $2.64 billion compared with $2.55 billion in the prior-year quarter. At the end of first-quarter 2018, capital expenditures were $79.4 million compared with $86.8 million in the prior year.

Share Repurchases

During the reported quarter, the company repurchased 550,000 shares for $27 million.

The company’s board has approved share-repurchase authorization of additional $250 million of common shares. With the increased authorization, AutoNation has roughly $314 million of share-repurchase authorization and roughly 91 million shares as of Apr 27, 2018.

Zacks Rank & Stocks to Consider

AutoNation carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the auto space are Visteon Corporation VC, Wabash National Corporation WNC and Fiat Chrysler Automobiles N.V. FCAU. Visteon and Wabash National carry a Zacks Rank #2 (Buy) while Fiat Chrysler sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Visteon has expected long-term growth rate of 16.7%. In the last three months, shares of the company have gained 3%.

Wabash National has expected long-term growth rate of 21.5%. Shares of the company have risen 1.6% in the last six months.

Fiat Chrysler has expected long-term growth rate of 23.7%. In the last six months, shares of the company have gained 20.7%.

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