Autonation Inc Earnings Cheat Sheet: Profit Rises for Fourth Straight Quarter

S&P 500 (NYSE:SPY) component Autonation Inc (NYSE:AN) reported its results for the third 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 Third Quarter

Results: Net income for Autonation Inc rose to $70.7 million (48 cents per share) vs. $59 million (39 cents per share) in the same quarter a year earlier. This marks a rise of 23% from the year earlier quarter.

Revenue: Rose 7% to $3.3 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: AN fell in line with the mean analyst estimate of 48 cents per share. It fell short of the average revenue estimate of $3.43 billion.

Quoting Management: Mike Jackson, Chairman and Chief Executive Officer, said, “We continued to deliver solid double-digit growth in operating income in the third quarter, which was driven by strong gross margins in new vehicles and finance and insurance.” Mr. Jackson added, “While shipments from the Japanese manufacturers improved in the third quarter, inventory levels of these vehicles remained constrained. We would expect that the improving supply environment will result in lower margins on these vehicles in the fourth quarter.”

Key Stats:

The company has now seen net income rise in four straight quarters. In the second quarter, net income rose 52.3% while the figure climbed 25.7% in the first quarter and 9.1% in the fourth quarter of the last fiscal year from the year earlier.

Gross margin shrank 5.5 percentage points to 11.2%. The contraction appeared to be driven by increased costs, which rose 7.4% from the year earlier quarter while revenue rose 0.8%.

The company fell in line with estimates last quarter after topping expectations in the previous two quarters. In the second quarter, it topped the mark by 2 cents, and in the first quarter, it was ahead by 3 cents.

Revenue has now gone up for three straight quarters. In the second quarter, revenue rose 7.3% to $3.34 billion while the figure rose 16.3% in the first quarter from the year earlier.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the fourth quarter is 47 cents per share, up from 45 cents ninety days ago. The average estimate for the fiscal year is $1.90 per share, a rise from $1.84 ninety days ago.

Competitors to Watch: Group one Automotive, Inc. (NYSE:GPI), Penske Automotive Group, Inc. (NYSE:PAG), Sonic Automotive, Inc. (NYSE:SAH), Asbury Automotive Group, Inc. (NYSE:ABG), Copart, Inc. (NASDAQ:CPRT), CarMax, Inc (NYSE:KMX), Lentuo Intl. Inc (ADR) (NYSE:LAS), Lithia Motors, Inc. (NYSE:LAD), AutoChina Intl. Ltd. (NASDAQ:AUTC), General Motors (NYSE:GM), Toyota (NYSE:TM), Ford (NYSE:F), CarMax (NYSE:KMX), AutoZone (NYSE:AZO) and America’s Car-Mart, Inc. (NASDAQ:CRMT).

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(Source: Xignite Financials)