) witnessed a 35% boost in adjusted earnings per share to 66 cents
in the second quarter of 2012 compared to 49 cents per share in the
corresponding quarter last year. With this, the profit surpassed
the Zacks Consensus Estimate of 59 cents per share.
In absolute terms, profits escalated 12% to $81.6 million from
$73.3 million in the year-ago quarter. Meanwhile, reported earnings
were $78.6 million or 64 cents per share compared with $71.9
million or 49 cents per share.
The company's revenues for the quarter came in at $3.9 billion, up
17% compared with $3.3 billion in the year-ago quarter. The growth
in revenues was driven by strong retail new vehicle unit sales.
Revenues were higher than the Zacks Consensus Estimate of $3.7
Revenues from new vehicle sales surged 26% to $2.2 billion. New
vehicle retail sales increased 29.3% to 66,987 units. However,
revenues per vehicle fell $919 to $32,784. On a same-store basis,
new vehicle retail sales went up 29% to 66,828 units, however,
revenues per vehicle decreased $887 to $32,816.
Revenues from used vehicle (retail and wholesale) went up 6.8% to
$947.4 million. Used vehicle retail sales improved 7.9% to 46,236
units with revenues declining 2.2% to $17,941. Same-store used
vehicle sales rose 7.5% to 46,029 units with a 2.1% fall in per
vehicle same store revenues to $17,971.
Revenues from parts and service went up 5.3% to $602.5 million.
Meanwhile, the company's finance and insurance business witnessed a
24% growth in revenues to $145.1 million.
Gross profit increased 7.6% to $628.0 million from $583.4 million
in the year ago quarter. The improvement was driven by higher gross
profit earned from the finance and insurance and parts and service
businesses. However, a loss in the used vehicle business had
adverse effect on the overall gross profit.
Gross profit per new vehicle retailed decreased 17.7% to $2,172
while gross profit per used vehicle retailed declined 9.8% to
$1,624. However, finance and insurance gross profit per vehicle
retailed rose 3.7% to $1,282.
Operating income swelled 13.7% to $164.2 million from $144.4
million recorded in the second quarter of 2011. However, operating
margin went down marginally to 4.2% from 4.3% in the last year.
segment comprises stores selling vehicles manufactured by
Ford Motor Co.
) and Chrysler. Revenues in this segment boosted 13.1% to $1,295.1
million. Unit sales augmented 17.3% to 21,993 vehicles. Segment
operating income improved 15.5% to $53.6 million from $46.4 million
in the second quarter of 2011.
Revenues in the
segment - comprising stores that sell vehicles, manufactured
Nissan Motor Co.
) went up 26.6% to $1.5 billion. Unit sales increased 44.3% to
33,715 automobiles. Segment operating income increased 7.5% to
$67.2 million from $62.5 million a year ago.
Revenues in the
segment - comprising stores that sell vehicles manufactured
) Mercedes, BMW and Lexus - went up 10.5% to $1.1 billion. Unit
sales rose 16.2% to 11,279 vehicles. Segment operating income rose
14.2% to $68.3 million from $59.8 million in the corresponding
quarter last year.
During the quarter, AutoNation repurchased 3.7 million shares for
$126.2 million. The company has 121 million shares outstanding as
of June 30, 2012. The company's Board of Directors authorized an
additional repurchase of $250 million shares. As a result, the
company has approximately $368 million worth of shares remaining
AutoNation's cash and cash equivalents declined to $62.1 million as
of June 30, 2012 from $81.8 million as of June 30, 2011. The
company's inventory was valued at $2.1 billion as of June 30, 2012
versus $1.8 billion as of June 30, 2011. Meanwhile, capital
expenditure increased to $47.9 million in the quarter from $38.9
million last year.
Headquartered in Fort Lauderdale, Florida, AutoNation is the
largest automotive retailer in the U.S. The company owns and
operates about 260 new vehicle franchises that sell 32 brands
located in the major metropolitan markets in 15 states. The company
offers an array of automotive products and services, ranging from
new vehicles, used vehicles, vehicle maintenance and repair
services, vehicle parts, vehicle protection products to other
Recovery in auto sales owing to improved customer confidence and
introduction of new products will boost the company's earnings. In
addition, revamped models of Civic and Accord as well as
stabilization of inventory are expected to help AutoNation
outperform the growth in U.S. light vehicle market. However, the
company's sales were adversely affected by higher fuel prices and
lower availability of sub prime loans.
Currently, AutoNation retains a Zacks #2 Rank, which translates
into a short-term (1 to 3 months) Buy rating and we have a
long-term (more than 6 months) Neutral recommendation on the
AUTONATION INC (AN): Free Stock Analysis Report
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