2 Stocks Building Trading Demand as Earnings Reviewed

Autonation Inc (NYSE:AN) reported net income above Wall Street’s expectations for the fourth quarter. 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. 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.

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.”

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

PRECISION CASTPARTS CORP (NYSE:PCP) reported its results for the third quarter. Net income for the metal fabrication company rose to $307.3 million ($2.11 per share) vs. $256.5 million ($1.78 per share) in the same quarter a year earlier. This marks a rise of 19.8% from the year earlier quarter. Revenue rose 14.2% to $1.82 billion from the year earlier quarter. PCP reported adjusted net income of $2.12 per share. By that measure, the company fell short of mean estimate of $2.21 per share. It fell short of the average revenue estimate of $1.91 billion.

“Our third quarter results solidly demonstrate the level of performance we can achieve at current order rates and provide a clear line of sight to what’s possible in the future,” said Mark Donegan, chairman and chief executive officer of Precision Castparts Corp. “Moving forward, the issue is strictly one of timing. The contracts are in place. The capacity is in place. As the orders pick up, and we move the product through our factories, our results will improve even further. We have plenty of opportunity for improvement in all of our operations, with significant upside as we leverage the upcoming acceleration in sales.”

Competitors to Watch: MS International plc (NYSE:MSI), Ladish Co., Inc. (NASDAQ:LDSH), Alcoa Inc. (NYSE:AA), Haynes International, Inc. (NASDAQ:HAYN), Allegheny Tech. Inc. (NYSE:ATI), Chicago Rivet & Machine Co. (AMEX:CVR), United Technologies Corp. (NYSE:UTX).

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