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AutoNation, Inc. (AN - Free Report) reported third-quarter 2023 adjusted earnings of $5.54 per share, which decreased 7.6% year over year but topped the Zacks Consensus Estimate of $5.42. This outperformance can be primarily attributed to higher-than-expected new and used vehicle revenues. In the reported quarter, revenues amounted to $6,892.7 million, surpassing the Zacks Consensus Estimate of $6,695 million. The company had recorded revenues of $6,666 million in the third quarter of 2022. Revenues across all three segments (Domestic, Import and Luxury) topped our projections.
AutoNation, Inc. Price, Consensus and EPS Surprise
In the reported quarter, new vehicle revenues were up 11.3% year over year to $3,187.6 million and also exceeded our estimate of $2,855.4 million on the back of stronger-than-expected volumes. New vehicle retail units sold totaled 62,289 units, topping our projection of 55,287 units as demand remained robust despite the high costs of vehicle financing. Average selling price (ASP) per new vehicle unit retailed came in at $51,174, down 0.7% year over year. Gross profit from the segment came in at $250.7 million, declining 24% year over year but marginally topping our estimate of $248.5 million.
Used-vehicle revenues contracted 9.6% from the year-ago figure to $2,172.1 million but beat our projection of $2,101 million on higher-than-expected volumes. Used vehicle retail units sold totaled 72,517 units, topping our projection of 67,829 units. ASP per used vehicle unit retailed came in at $27,926, declining 6.6% year over year. Gross profit from the segment came in at $127.8 million, down 10% and lagging our projection of $131 million.
Net revenues in the finance and insurance business amounted to $369.5 million, up 2.4% from the year-ago quarter, but were below our projection of $382.5 million. Gross profit was $369.5 million, up 2.4%. However, it missed our estimate of $382.5 million.
Revenues from the parts and service business rose 12.1% to $1,157.4 million, topping our forecast of $1,082 million. Gross profit from this segment came in at $545.8 million, rising 14% year over year and beating our estimate of $506.4 million.
Segmental Details
Revenues from the Domestic segment declined 2.4% year over year to $1,983.9 million but exceeded our projection of $1,822.7 million. The segment’s income declined 24.9% to $107.2 million, marginally beating our estimate of $105.6 million.
Revenues from the Import segment rose 10.8% from the prior-year quarter to $2,077.2 million and outpaced our forecast of $1,825.6 million. The segment’s income contracted 8.7% to $164.7 million but topped our projection of $147 million.
Premium Luxury segment sales moved up 0.4% to $2,516.1 million, outpacing our projection of $2,503.4 million. The segmental income was down 18% year over year to $192.9 million in the reported quarter and missed our estimate of $198.9 million.
Financial Tidbits
AutoNation’s cash and cash equivalents were $64 million as of Sep 30, 2023, declining from $72.6 million recorded as of Dec 31, 2022. The company’s liquidity was $1.6 billion, including $64 million in cash and nearly $1.55 billion available under its revolving credit facility.
The firm’s inventory was valued at $2,645.6 million. At the end of the third quarter, non-vehicle debt was $3,942.4 million, increasing from $3,649.5 million recorded as of 2022 end. Capital expenditure in the quarter amounted to $87 million.
During the third quarter of 2023, AutoNation repurchased 1.3 million shares of common stock for an aggregate purchase price of $200 million. As of Oct 25, AutoNation had approximately $439 million shares remaining under its buyback authorization. About 43 million shares are outstanding, marking a 49% decrease from 83 million outstanding shares as of 2020 end.
Zacks Rank & Key Picks
AutoNation currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for TM’s fiscal 2024 sales and EPS implies year-over-year growth of 10.5% and 30.9%, respectively. The earnings estimate for fiscal 2024 and 2025 has been revised upward by 45 cents and 40 cents, respectively, in the past seven days.
The Zacks Consensus Estimate for HMC’s fiscal 2024 sales and EPS implies year-over-year growth of 7.7% and 31%, respectively. The earnings estimate for fiscal 2024 and 2025 has been revised upward by 9 cents and 24 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for STLA’s 2023 sales and EPS implies year-over-year growth of 8% and 10.2%, respectively. The earnings estimate for 2023 and 2024 has been revised upward by 27 cents and 13 cents, respectively, in the past seven days.
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AutoNation (AN) Q3 Earnings & Revenues Outpace Estimates
AutoNation, Inc. (AN - Free Report) reported third-quarter 2023 adjusted earnings of $5.54 per share, which decreased 7.6% year over year but topped the Zacks Consensus Estimate of $5.42. This outperformance can be primarily attributed to higher-than-expected new and used vehicle revenues. In the reported quarter, revenues amounted to $6,892.7 million, surpassing the Zacks Consensus Estimate of $6,695 million. The company had recorded revenues of $6,666 million in the third quarter of 2022. Revenues across all three segments (Domestic, Import and Luxury) topped our projections.
AutoNation, Inc. Price, Consensus and EPS Surprise
AutoNation, Inc. price-consensus-eps-surprise-chart | AutoNation, Inc. Quote
Key Takeaways
In the reported quarter, new vehicle revenues were up 11.3% year over year to $3,187.6 million and also exceeded our estimate of $2,855.4 million on the back of stronger-than-expected volumes. New vehicle retail units sold totaled 62,289 units, topping our projection of 55,287 units as demand remained robust despite the high costs of vehicle financing. Average selling price (ASP) per new vehicle unit retailed came in at $51,174, down 0.7% year over year. Gross profit from the segment came in at $250.7 million, declining 24% year over year but marginally topping our estimate of $248.5 million.
Used-vehicle revenues contracted 9.6% from the year-ago figure to $2,172.1 million but beat our projection of $2,101 million on higher-than-expected volumes. Used vehicle retail units sold totaled 72,517 units, topping our projection of 67,829 units. ASP per used vehicle unit retailed came in at $27,926, declining 6.6% year over year. Gross profit from the segment came in at $127.8 million, down 10% and lagging our projection of $131 million.
Net revenues in the finance and insurance business amounted to $369.5 million, up 2.4% from the year-ago quarter, but were below our projection of $382.5 million. Gross profit was $369.5 million, up 2.4%. However, it missed our estimate of $382.5 million.
Revenues from the parts and service business rose 12.1% to $1,157.4 million, topping our forecast of $1,082 million. Gross profit from this segment came in at $545.8 million, rising 14% year over year and beating our estimate of $506.4 million.
Segmental Details
Revenues from the Domestic segment declined 2.4% year over year to $1,983.9 million but exceeded our projection of $1,822.7 million. The segment’s income declined 24.9% to $107.2 million, marginally beating our estimate of $105.6 million.
Revenues from the Import segment rose 10.8% from the prior-year quarter to $2,077.2 million and outpaced our forecast of $1,825.6 million. The segment’s income contracted 8.7% to $164.7 million but topped our projection of $147 million.
Premium Luxury segment sales moved up 0.4% to $2,516.1 million, outpacing our projection of $2,503.4 million. The segmental income was down 18% year over year to $192.9 million in the reported quarter and missed our estimate of $198.9 million.
Financial Tidbits
AutoNation’s cash and cash equivalents were $64 million as of Sep 30, 2023, declining from $72.6 million recorded as of Dec 31, 2022. The company’s liquidity was $1.6 billion, including $64 million in cash and nearly $1.55 billion available under its revolving credit facility.
The firm’s inventory was valued at $2,645.6 million. At the end of the third quarter, non-vehicle debt was $3,942.4 million, increasing from $3,649.5 million recorded as of 2022 end. Capital expenditure in the quarter amounted to $87 million.
During the third quarter of 2023, AutoNation repurchased 1.3 million shares of common stock for an aggregate purchase price of $200 million. As of Oct 25, AutoNation had approximately $439 million shares remaining under its buyback authorization. About 43 million shares are outstanding, marking a 49% decrease from 83 million outstanding shares as of 2020 end.
Zacks Rank & Key Picks
AutoNation currently carries a Zacks Rank #3 (Hold).
A few top-ranked players in the auto space include Toyota (TM - Free Report) , Honda (HMC - Free Report) and Stellantis (STLA - Free Report) . While TM and HMC sport a Zacks Rank #1 (Strong Buy), STLA carries a Zacks Rank #2 (Buy) currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TM’s fiscal 2024 sales and EPS implies year-over-year growth of 10.5% and 30.9%, respectively. The earnings estimate for fiscal 2024 and 2025 has been revised upward by 45 cents and 40 cents, respectively, in the past seven days.
The Zacks Consensus Estimate for HMC’s fiscal 2024 sales and EPS implies year-over-year growth of 7.7% and 31%, respectively. The earnings estimate for fiscal 2024 and 2025 has been revised upward by 9 cents and 24 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for STLA’s 2023 sales and EPS implies year-over-year growth of 8% and 10.2%, respectively. The earnings estimate for 2023 and 2024 has been revised upward by 27 cents and 13 cents, respectively, in the past seven days.