Vehicles are displayed on the market at an AutoNation automobile dealership on April 21, 2022 in Valencia, California.
Mario Tama | Getty Images
A solid fourth-quarter earnings report from AutoNation on Friday propelled the automobile dealer’s stock to a latest all-time high and its best day in nearly three years.
The Florida-based dealership group reported an adjusted earnings per share of $6.37 and revenue of $6.7 billion for the previous quarter. That compares to analyst expectations of $5.83 a share and $6.5 billion in revenue, in response to Refinitiv.
AutoNation closed Friday at $157.30 a share, marking a latest high for the auto dealer’s stock following an 11.4 % increase to finish the week. It was the stock’s best each day performance since April 2020 and a latest record-high closing price.
The rise follows AutoNation last yr reducing shares outstanding by 25% because it repurchased 15.6 million shares, including 4.6 million through the fourth quarter.
AutoNation CEO Mike Manley attributed the solid quarter and record yr of earnings to operational execution in addition to latest all-time high earnings in after sales and customer financing.
“In the course of the yr, we expanded our footprint, introduced additional transportation solutions, and leveraged our strong money flow to fund investments and return capital to shareholders,” Manley said in a release.
AutoNation’s 2022 money flows from operations were a record $1.7 billion. Its net income last yr was roughly flat from 2021, despite a 26% decline within the fourth quarter to $286.4 million.
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AutoNation’s shares during the last five years.
Large dealers equivalent to AutoNation have been reporting record results through the coronavirus pandemic, as consumer demand remained resilient but latest vehicle inventories were at record lows as a consequence of production interruptions as a consequence of the worldwide health crisis in addition to supply chain problems.
The circumstances pushed AutoNation to pivot to sell more used cars than latest through the pandemic, as those that couldn’t afford or discover a latest vehicle moved to the used automobile market. That propelled prices to latest record highs and profits for used vehicle sales.
Vehicle inventories have been slowly rising for many automobile brands in recent months. Nonetheless, there remain hurdles and Wall Street has been monitoring for a “demand destruction” scenario wherein pent-up demand from the past three years is depleted.
AutoNation didn’t release guidance for 2023. Manley told Automotive News he expects the seasonally adjusted annual rate of light-vehicle sales to be close to fifteen million this yr, up from 13.7 million in 2022.
“I believe for the foreseeable future, the retail industry will proceed to evolve including how customers approach vehicle ownership and usage,” he said during an earnings call Friday. “And it’s an exciting time, frankly to be on the segment and we consider the evolving landscape offers many opportunities.”
