By Anne Steele
AutoNation Inc., the nation's largest auto retailer, posted a
17% increase in net income for the first quarter as low fuel
prices, easy credit and surging U.S. demand for new and used light
vehicles helped lift performance.
The company said Wednesday that earnings from continuing
operations equaled $111.5 million or 97 cents per share, beating
analysts' expectations of 88 cents a share. The first-quarter
profit was up from $96 million, or 79 cents a share, earned over
the first three months of 2014.
First-quarter revenue climbed 13% over last year to $4.94
billion. New-car retail sales rose 9% on a same-store basis while
used-car sales rose 11% in the just-ended quarter.
The Fort Lauderdale, Fla., retailer said domestic vehicle sales
represented the biggest area of earnings growth over the period,
with income growing 24% during the period. Sales of more profitable
trucks and SUVs have been on the rise amid lower gas prices, a
factor that benefits sellers of Ford Motor Co., General Motors Co.
and Fiat Chrysler Automobiles.
AutoNation Chief Executive Mike Jackson reiterated his forecast
for U.S. light-vehicle sales of 17 million this year. The company's
stock is up 6.7% since the beginning of 2015, closing Tuesday at
$64.90 Tuesday. It is up roughly 30% since the beginning of
2014.
The company continued its dealership buying spree in the first
quarter, snapping up luxury-brand stores in California, Washington
and Nevada. The move comes amid a costly new wave of consolidation
taking place in the car retailing industry, as AutoNation and other
mega dealers and deep-pocketed investors encounter higher
dealership valuations and intensifying competition among asset
buyers.
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