- AutoNation’s solid earnings pushed the auto dealer’s stock to a new all-time high and its best day in nearly three years.
- The Florida-based dealership group reported adjusted earnings per share of $6.37 on revenue of $6.7 billion last quarter.
- AutoNation closed at $157.30 per share, marking a new high for the auto dealer’s stock after an 11.4% gain to end the week.
Vehicles are displayed for sale at an AutoNation car dealership on April 21, 2022 in Valencia, California.
Mario Tama | Getty Images
A strong fourth-quarter earnings report from AutoNation on Friday pushed the auto dealer’s stock to a new all-time high and its best day in nearly three years.
The Florida-based dealership group reported adjusted earnings per share of $6.37 and revenue of $6.7 billion for the previous quarter. That compares with analysts’ expectations of $5.83 a share and $6.5 billion in revenue, according to Refinitiv.
AutoNation closed Friday at $157.30 a share, marking a new high for the auto dealer’s stock after an 11.4% gain to end the week. It was the stock’s best daily performance since April 2020 and a new record closing price.
The increase comes after AutoNation reduced outstanding shares by 25% last year as it repurchased 15.6 million shares, including 4.6 million in the fourth quarter.
AutoNation CEO Mike Manley attributed the strong quarter and record year of earnings to operational execution as well as new all-time high revenues in aftersales and customer financing.
“During the year, we expanded our footprint, introduced additional transportation solutions and leveraged our strong cash flow to fund investments and return capital to shareholders,” Manley said in a statement.
AutoNation’s cash flows from operations in 2022 were a record $1.7 billion. Its net income last year was roughly flat through 2021, despite a 26% drop in the fourth quarter to $286.4 million.
See graph…
AutoNation’s stock over the past five years.
Major dealerships such as AutoNation have been reporting record results during the coronavirus pandemic as consumer demand remained resilient, but new vehicle inventories were at record lows due to production disruptions due to the crisis global health and supply chain issues.
Circumstances pushed AutoNation to pivot to sell more used cars than new during the pandemic, as those who couldn’t afford or find a new vehicle turned to the used car market. This drove prices to new record highs and profits for used vehicle sales.
Vehicle inventories have been slowly increasing for many auto brands in recent months. However, hurdles remain and Wall Street has been monitoring a “demand destruction” scenario in which the accumulated demand of the past three years runs out.
AutoNation did not release guidance for 2023. Manley told Automotive News that he expects the annual seasonally adjusted light vehicle sales rate to be closer to 15 million this year, up from 13.7 million in 2022.
“I think for the foreseeable future, the retail industry will continue to evolve, including the way customers approach vehicle ownership and use,” he said on an earnings call Friday. “And it’s an exciting time, frankly, to be in the segment and we think the evolving landscape offers a lot of opportunity.”
