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AutoNation Tops Earnings Estimates on Pent-Up Demand for Cars. The Stock Is Surging.AutoNation Tops Earnings Estimates on Pent-Up Demand for Cars. The Stock Is Surging. Vanjani, Karishma. Barron's (Online); New York Shares of AutoNation were climbing in premarket trading Thursday after the automotive retailer reported better-than-expected third-quarter earnings on continued strong demand for used car sales during the pandemic. Adjusted third-quarter earnings were $5.12 a share, surpassing estimates of $4.20. Same-store used-car revenue increased by 53% year over year, while new vehicle revenue was flat for the same period. AutoNation (ticker: AN) said total revenue for the third-quarter was $6.38 billion, up 18% from the same period a year earlier. Analysts at FactSet expected sales of $6.29 billion. "During the quarter, consumer demand continued to outpace supply, driven by consumer desire for personal transportation and ongoing manufacturing supply-chain disruptions," the company said in a statement. "New vehicle inventory remains at historically low levels, which combined with strong execution, has supported record profitability." CEO Mike Jackson added that new-vehicle sales were "constrained by reduced production volume with low inventory levels. We expect this pent-up demand to support sales for the foreseeable future." While supply-chain issues continue to impact new car inventories, car dealers like AutoNation have been managing those pressures. Lithia Motors , an AutoNation competitor, posted strong third-quarter numbers on Wednesday . The car dealer earned $10.11 a share and generated $6.2 billion in sales , beating estimates of $9.30 a share from $5.8 billion in sales. AutoNation's stock was rising 9.4% to $128 in premarket trading Thursday. |
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