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Analyst Blog

Shares of automotive retailer AutoNation Inc. (AN - Analyst Report) gained 6.2% and reached $51.13 over the four days following the release of its January retail sales figures. Total retail sales of new vehicles increased 0.4% year over year to 19,434 units in Jan 2014. On a same-store basis, retail new vehicle sales declined 2% from Jan 2013 to 18,964 units.

Retail new vehicle unit sales in AutoNation’s Domestic segment declined 2% to 6,006 vehicles. The segment comprises retail automotive franchises that sell vehicles manufactured by Ford Motor Co. (F - Analyst Report), Chrysler and others.

Sales in AutoNation’s Import segment escalated 3% to 9,646 vehicles in Jan 2014. The segment covers retail automotive franchises that sell vehicles manufactured by Toyota Motor Corporation (TM - Analyst Report), Honda Motor Co., Ltd. (HMC - Analyst Report) and others.

In the Premium Luxury segment of AutoNation, sales fell 2% to 3,782 vehicles during the month. This segment consists of retail automotive franchises selling vehicles manufactured by Mercedes Benz, BMW, Lexus and others.

Earnings Review

AutoNation 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.

Revenues increased 8.4% to $4.5 billion, marginally missing the Zacks Consensus Estimate of $4.6 billion. Revenue growth was attributable to strong performance in all business sectors. The company’s Premium Luxury segment was the biggest gainer in the quarter.

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.

AutoNation currently holds a Zacks Rank #2 (Buy).

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