) posted a 13.7% rise in earnings per share to 83 cents in the
second quarter of 2014 from 73 cents in the same quarter of 2013.
However, earnings per share missed the Zacks Consensus Estimate of
Net income improved 11.7% to $100.4 million from $89.9 million in
the second quarter of 2013. Operating income increased 9.3% to
$197.8 million or 4.1% of sales from $180.9 million or 4.1% a year
Revenues increased 8.2% to $4.79 billion, marginally beating the
Zacks Consensus Estimate of $4.77 billion. The upside can be
attributed to strong performance in new vehicles, parts and
service, and finance and insurance business sectors. The company's
Premium Luxury segment gained the most in the quarter.
New vehicle revenues escalated 9.8% to $2.7 billion on an 8.3% rise
in new vehicle unit sales to 80,554 vehicles. Revenues per vehicle
increased 1.3% to $33,976. On a same-store basis, new vehicle
revenues augmented 8% to $2.7 billion.
Used vehicle (retail and wholesale) revenues spiked 2.4% to $1.08
billion on a 3.7% revenue rise in the retail sector, which was
partially offset by a 9.1% decline in wholesale revenues. Unit
sales increased 1% to 52,656 vehicles while revenues per vehicle
rose 2.6% to $18,784. On a same-store basis, used vehicle revenues
increased 1.1% to $1.07 billion.
Revenues in the Parts and Service business grew 7.5% to $704.8
million in the second quarter. Meanwhile, Finance and insurance
business recorded a 6.6% increase in revenues to $185.4 million.
Revenues in the Domestic segment - comprising stores that sell
vehicles manufactured by
General Motors Co.
Ford Motor Co.
) and Chrysler - increased 5.9% to $1.6 billion as unit sales rose
3.9% to 26,182 vehicles. The segment's operating income improved
6.7% to $70.5 million in the second quarter of 2014.
Revenues in the Import segment - consisting of stores that sell
vehicles manufactured primarily by
Toyota Motor Corp.
) and other Japanese automakers - increased 5.4% to $1.72 billion
on an 8.9% rise in unit sales to 39,685 automobiles. Operating
income at the segment improved 6.3% to $77.5 million in the
Revenues in the Premium Luxury segment - consisting of stores that
sell vehicles manufactured primarily by Mercedes, BMW and Lexus -
advanced 15.3% to $1.4 billion. Unit sales rose 15.5% to 14,687
vehicles. Meanwhile, the segment's operating income improved 13.3%
to $85.8 million in the quarter.
Balance Sheet and Capex
AutoNation's cash and cash equivalents decreased to $68.5 million
as of Jun 30, 2014 from $69.7 million as of Jun 30, 2013. The
company's inventory was valued at $2.8 billion as of Jun 30, 2014
versus $2.6 billion as of Jun 30, 2013.
Non-vehicle debt decreased to $1.88 billion from $1.94 billion as
of Jun 30, 2013. Capital expenditures increased to $87.8 million in
the first half of 2014 from $54.6 million in the same period a year
Share Repurchase Program
AutoNation repurchased 1.1 million shares for an aggregate price of
$64.1 million in the second quarter. As of Jul 16, 2014, AutoNation
had around $336 million worth of shares remaining for share
repurchase and 119 million shares outstanding.
In Jul 2014, AutoNation completed the acquisition of Roundtree
Chrysler Dodge Jeep Ram in the Mobile, Alabama market. The expected
annual revenue from this store is approximately $95 million.
AutoNation expects new vehicle sales in the U.S. to increase 3-5%
to above 16 million units in 2014.
AutoNation is the largest automotive retailer in the U.S. and is
headquartered in Fort Lauderdale, FL. As of Jul 16, 2014, the
company owned and operated 273 new vehicle franchises that sell 33
brands across 15 major metropolitan states. Currently, the company
sports a Zacks Rank #1 (Strong Buy).
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