AutoNation (AN) Q4 Earnings & Revenues Surpass Estimates

AutoNation Inc. (NYSE:AN) reported adjusted earnings of $1.02 per share in fourth-quarter fiscal 2017, surpassing the Zacks Consensus Estimate of 92 cents. Earnings from continuing operations came in at $1.64.

Net income from continuing operations increased to $152 million from $116 million in fourth-quarter fiscal 2016.

During the quarter, AutoNation reported revenues of $5.69 billion, rising 3.7% year over year. Also, the top line beat the Zacks Consensus Estimate of $5.56 billion.

AutoNation, Inc. Price, Consensus and EPS Surprise

AutoNation, Inc. Price, Consensus and EPS Surprise | AutoNation, Inc. Quote

New vehicle revenues increased 4.9% year over year to $3.35 billion in fourth-quarter fiscal 2017. However, used vehicle revenues declined 0.8% year over year to $1.21 billion. Parts and service business revenues grew 3.8% year over year to $854 million in fourth-quarter fiscal 2017. Finance and insurance business revenues came in at $247 million, reflecting a 14.2% increase.

Fiscal 2017 Results

AutoNation reported earnings of $4.43 per share in fiscal 2017, up from $4.15 earned in fiscal 2016. Also, earnings outpaced the Zacks Consensus Estimate of $3.75.

Net income was $434.6 million in comparison to $430.5 million a year ago. Consolidated revenues were $12.18 billion in comparison to $12.26 billion recorded in fiscal 2016. The figure missed the Zacks Consensus Estimate of $21.42 billion.

Segment Details

Revenues at the Domestic segment — comprising stores that sell vehicles manufactured by General Motors (NYSE:GM), Ford and FCA US — declined 1.4% to $1.9 billion. The segment’s income gained 4% to $67 million in the quarter under review.

Revenues at the Import segment — consisting of outlets that sell vehicles manufactured, primarily by Toyota, Honda, Nissan and Hyundai — increased 3.9% to $1.75 billion. However, segment income gained 13% to $75 million in the reported quarter.

Revenues at the Premium Luxury segment retail vehicles manufactured, primarily by Mercedes-Benz, BMW, Lexus and Audi. The sales figure rose 7.7% to $1.94 billion. Segmental income grew 13% to $106 million in the reported quarter.

Balance Sheet and Capex

AutoNation’s cash and cash equivalents were $69.2 million as of Dec 31, 2017, increasing from $64.8 million as of Dec 31, 2016. The company’s inventory was valued at $3.4 billion as of Dec 31, 2017 compared with $3.5 billion as of Dec 31, 2016.

As of Dec 31, 2017, non-vehicle debt was $2.7 billion in comparison to $2.72 billion a year ago. At the end of the fiscal, capital expenditures were $333 million compared with $253.2 million at the prior year-end.

Share Repurchases

In fiscal 2017, the company repurchased 10.1 million shares for $435 million. As of Jan 31, 2018, AutoNation had approximately $114 million remaining under its share repurchase program and around 92 million shares outstanding.

Price Performance

Shares of AutoNation have soared 49.9% in the last six months, outperforming the 33.9% rise of the industry it belongs to.

Zacks Rank & Other Key Picks

AutoNation flaunts a Zacks Rank #1 (Strong Buy). Other top-ranked stocks in the auto space include Daimler AG (OTC:DDAIF) , Lear Corporation (NYSE:LEA) and Volkswagen (DE:VOWG_p) A.G. (OTC:VLKAY) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Daimler has an expected long-term growth rate of 2.8%. Shares of the company have climbed 26.4% in the last six months.

Lear Corp has an expected long-term growth rate of 7.1%. The stock has jumped 34.7% in the last six months.

Volkswagen has an expected long-term growth rate of 18.7%. In the last six months, shares of the company have rallied 42.4%.

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