) reported all-time record high adjusted earnings from operations
in the fourth quarter of 2013. The company posted a 24% rise in
earnings per share to 83 cents in the fourth quarter from 67
cents in the same quarter of 2012. Earnings per share surpassed
the Zacks Consensus Estimate by 6 cents.
Net income improved 22.8% to $101.8 million from $82.9 million in
the fourth quarter of 2012. Operating income increased 20.2% to
$202.8 million or 4.5% of sales from $168.7 million or 4% a year
ago. Improvement in operating income and earnings per share was
driven by better gross profit earned in all business sectors.
Revenues increased 8.4% to $4.5 billion, marginally missing the
Zacks Consensus Estimate of $4.6 billion. The revenue growth was
attributable to strong performance in all business sectors. The
company's Premium Luxury segment was the biggest gainer in the
New vehicle revenues escalated 6.5% to $2.6 billion with new
vehicle unit sales rising 5% to 74,468 vehicles. Revenues per
vehicle increased 1.5% to $35,407. On same-store basis, new
vehicle revenues increased 2.2% to $2.5 billion.
Used vehicle (retail and wholesale) revenues increased 11.5% to
$1 billion as revenues rose 15.7% in the retail section, which
was partially offset by a 15.3% decline in the wholesale
revenues. Unit sales increased 14.7% to 49,292 vehicles, revenues
per vehicle rose 0.9% to $18,496. On same-store basis, used
vehicle revenues increased 7.1% to $972.4 million.
Revenues in the Parts and Service business grew 8.5% to $651.1
million in the quarter. Meanwhile, Finance and insurance business
recorded a 13.9% increase in revenues to $169.6 million.
Revenues in the Domestic segment - comprising stores that sell
vehicles manufactured by
General Motors Co.
Ford Motor Co.
) and Chrysler - increased 9.7% to $1.5 billion as unit sales
rose 7% to 23,387 vehicles. Segment operating income improved
6.5% to $57.7 million in the fourth quarter of 2013.
Revenues in the Import segment - comprising stores that sell
vehicles manufactured primarily by
Toyota Motor Corp.
) and other Japanese automakers - increased 5.8% to $1.5 billion
on a 4.1% rise in unit sales to 34,943 automobiles. Segment's
operating income escalated 6.2% to $63.5 million in the quarter.
Revenues in the Premium Luxury segment - consisting of stores
that sell vehicles manufactured primarily by Mercedes, BMW and
Lexus - advanced 10.2% to $1.5 billion. Unit sales rose 4.2% to
16,138 vehicles. Segment's operating income grew 27.7% to $102.7
million in the quarter.
Fiscal 2013 Performance
AutoNation posted adjusted earnings rise of 17% year over year to
$2.98 per share for full-year 2013, beating the Zacks Consensus
Estimate of $2.94. Revenues for full-year 2013 increased 11.8% to
roughly $17.5 billion from $15.7 billion in 2012, marginally
missing the Zacks Consensus Estimate of $17.6 billion.
Balance Sheet and Capex
AutoNation's cash and cash equivalents decreased to $69.2 million
as of Dec 31, 2013 from $69.7 million as of Dec 31, 2012. The
company's inventory was valued at $2.8 billion as of Dec 31, 2013
versus $2.4 billion as of Dec 31, 2012.
Non-vehicle debt decreased to $1.8 billion from $2.1 billion as
of Dec 31, 2012. Capital expenditures increased to $207.2 million
in 2013 from $183.6 million in 2012.
During the quarter, AutoNation completed the acquisition of
O'Hare Honda and O'Hare Hyundai in Chicago, Ill. It is expected
that these stores will generate annual revenues of $85 million
with retail sales volume of 3,100 new and used vehicles.
Share Repurchase Program
AutoNation repurchased 1.0 million shares for an aggregate price
of $49 million in the fourth quarter of 2013. From Jan 1 - Jan
29, 2014, the company repurchased 2.3 million shares for an
aggregate price of $111 million.
In addition, the board of directors of the company authorized an
additional repurchase of up to $250 million of shares. As of Jan
29, 2014, AutoNation had around $405 million remaining for share
repurchase and 119 million shares outstanding.
AutoNation expects its new vehicle sales to exceed 16 million
units in 2014 based on its innovative array of products and
better access to affordable credit.
AutoNation is the largest automotive retailer in the U.S. and is
headquartered in Fort Lauderdale, Fla. As of Jan 30, 2013, the
company owned and operated 269 new vehicle franchises that sell
33 brands in the major metropolitan markets of 15 states.
Currently, the company retains a Zacks Rank #4 (Sell).
AUTONATION INC (AN): Free Stock Analysis
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