Autonation Earnings Cheat Sheet: Beats Street, But Revises Outlook on Japan Constraint

S&P 500 (NYSE:SPY) component Autonation Inc (NYSE:AN) reported net income above Wall Street’s expectations for the first quarter. AutoNation, Inc. 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 First Quarter

Results: Net income for Autonation Inc rose to $69.4 million (46 cents/share) vs. $55.2 million (32 cents/share) in the same quarter a year earlier. A rise of 25.7% from the year earlier quarter.

Revenue: Rose 16.3% to $3.31 billion YoY.

Actual vs. Wall St. Expectations: AN beat the mean analyst estimate of 43 cents/share. Estimates ranged from 40 cents per share to 47 cents per share.

Quoting Management: Mike Jackson, Chairman and Chief Executive Officer, said, “We delivered solid double-digit growth in the first quarter, which was driven by both new and used vehicle unit sales and revenue.” Commenting on the impact of the Japan earthquake on the full-year industry outlook, Mr. Jackson said, “While the underlying recovery in consumer demand for autos remains on track in the United States, due to Japanese supply constraints throughout the remainder of 2011, we are revising our planning assumption for 2011 full-year U.S. industry new vehicle sales downward from 12.8 million units to mid-12 million units. Based on current information, we see significant reductions in vehicle shipments from Japanese manufacturers through year-end, with the resumption of normal shipment levels in early 2012.”

Key Stats: Last quarter marked the fifth straight quarter that the company saw shrinking gross margins as gross margin fell 0.8 percentage point to 17.1% from the year earlier quarter. Over that time, margins have contracted on average 10.5 percentage points per quarter on a year-over-year basis.

The company has now seen net income rise in two-straight quarters. In the fourth quarter of the last fiscal year, net income rose 9.1% from the year earlier.

Over the last five quarters, revenue has increased 20.2% on average year over year. The biggest increase came in the third quarter of the last fiscal year, when revenue rose more than twofold from the year earlier quarter.

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:T), Ford (NYSE:F), CarMax (NYSE:KMX), AutoZone (NYSE:AZO) and America’s Car-Mart, Inc. (NASDAQ:CRMT).

Today’s Performance: Shares of AN are trading at $34.51 as of April 26, 2011 at 9:19 AM ET, unchanged from the previous close.


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