- AutoNation’s solid gains propelled 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 for the most recent quarter.
- AutoNation closed at $157.30 a share, marking a new high for the auto dealer’s stock after an 11.4% gain over the weekend.
Vehicles will go on sale at an AutoNation dealership on April 21, 2022 in Valencia, California.
Mario Tama | Getty Images
A solid 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 dealer group reported adjusted earnings per share of $6.37 on sales of $6.7 billion for the previous quarter. That compares to analyst expectations of $5.83 per share and $6.5 billion in revenue, according to Refinitiv.
AutoNation closed at $157.30 a share on Friday, marking a new high for the auto dealer’s stock after rising 11.4% at the end of the week. It was the stock’s best one-day performance since April 2020 and a new record closing price.
The surge follows AutoNation last year when it reduced outstanding shares by 25% as it repurchased 15.6 million shares, including 4.6 million in the fourth quarter.
AutoNation CEO Mike Manley attributed the solid quarter and record year of earnings to operational execution and new record earnings in customer service 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 press release.
AutoNation’s 2022 operating cash flow was a record $1.7 billion. Net income was roughly flat last year from 2021, despite a 26% decline in the fourth quarter to $286.4 million.
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AutoNation shares over the past five years.
Major dealerships such as AutoNation have reported record results during the coronavirus pandemic as consumer demand remained robust but new vehicle inventories were at record lows due to production disruptions due to the global health crisis and supply chain issues.
Circumstances prompted AutoNation to sell more used cars than new cars during the pandemic as those who couldn’t afford or find a new vehicle turned to the used car market. That drove prices to new record highs and profits for used car sales.
Vehicle inventories have slowly increased for many car brands in recent months. However, hurdles remain, and Wall Street has been waiting for a “demand-destruction” scenario, in which the pent-up demand of the past three years is used up.
AutoNation has not released a forecast for 2023. Manley told Automotive News he expects the seasonally adjusted annual rate of light vehicle sales to be nearly 15 million this year, up from 13.7 million in 2022.
“I think the retail industry will continue to evolve for the foreseeable future, including the way customers engage with vehicle ownership and use,” he said during an earnings call on Friday. “And frankly it’s an exciting time to be in this segment and we believe the evolving landscape offers a lot of opportunities.”