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AutoNation Q1 Earnings Miss Estimates on Soft New-Vehicle Sales
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Key Takeaways
AutoNation Q1 EPS and revenues missed estimates as sales fell and costs rose year over year.
AN's new-vehicle revenues dropped on lower volumes, with units down 7.9% and profit per unit shrinking.
AutoNation's parts, service and finance segments showed resilience, supporting overall profit.
AutoNation, Inc. (AN - Free Report) reported first-quarter 2026 adjusted earnings of $4.69 per share, which missed the Zacks Consensus Estimate of $4.71 by 0.43%. Revenues amounted to $6.55 billion, which missed the Zacks Consensus Estimate of $6.66 billion by 1.6%. The top line declined from $6.69 billion reported in the first quarter of 2025.
The results showed a familiar pattern: strong performance in higher-margin businesses was offset by weaker sales volumes and higher costs. Adjusted free cash flow was $255.6 million, with a solid 155% conversion of adjusted net income.
AutoNation, Inc. Price, Consensus and EPS Surprise
AN’s Top-Line Miss Tied to Lower New-Vehicle Revenues
AN’s consolidated revenues declined as new-vehicle sales softened. New-vehicle revenues fell to $3.01 billion from $3.25 billion a year ago, mainly due to fewer cars being sold and a lower contribution from this segment.
New vehicle retail units sold dropped 7.9% year over year to 57,482 units. The average selling price (ASP) per new vehicle unit retailed was $52,382. Gross profit from the segment was $144.5 million, which declined 17.4% year over year. Gross profit per new vehicle retailed slid to $2,514, indicating profitability pressures in the new-vehicle channel versus the year-ago period.
AN’s Used and F&I Trends Show Resilience Despite Volumes
AN’s used-vehicle results were more stable than new vehicles, helped by pricing and mix. Retail used-vehicle revenues increased 1.5% year over year to $1.82 billion, while used vehicle retail units sold declined 3.2% to 65,818 units. ASP per used vehicle unit retailed totaled $27,646. Gross profit from the segment was $104.9 million. Gross profit per used vehicle retailed totaled $1,594.
Revenues from wholesale used vehicles were up 10.7% to $144.2 million. Gross profit rose to $16.5 million from $11.5 million reported a year ago.
Finance and insurance remained a steady earnings contributor. Finance and insurance, net revenues were essentially flat at $352 million, and gross profit from the segment was $352 million. Gross profit per unit in this category improved to $2,855. Combined with used-vehicle dynamics, these steadier lines continued to support gross profit durability even as total retail units fell.
AutoNation’s After-Sales Business Again Carries the Mix
AutoNation’s parts and service operation delivered the clearest growth signal in the quarter. Parts and service revenues increased 4.9% year over year to $1.22 billion, supported by continued demand for maintenance and repair work.
Profitability remained strong in this area. Parts and service gross profit increased to $593.4 million from $567.7 million last year, making it the biggest contributor to overall profit and helping offset weaker new-vehicle performance.
AN Segment Performance Mixed Across Regions
Revenues from the Domestic segment totaled $1.72 billion. The segment’s income climbed 13.2% to $78.1 million.
Revenues from the Import segment totaled $2.05 billion. The segment’s income declined 9.8% to $113.8 million.
Premium Luxury segment sales fell 5.2% to $2.44 billion. The segmental income declined 13.4% year over year to $154.8 million.
Gross profit was mostly steady, but costs moved higher. Total gross profit dipped slightly to $1.21 billion from $1.22 billion, while SG&A expenses rose to $842.2 million from $821.9 million, putting pressure on margins.
Operating income fell 6.5% year over year to $314.3 million. On a comparable basis, it declined to $311.7 million, while adjusted SG&A rose to 69.8% of gross profit from 67.5% last year, highlighting higher costs despite only a small change in gross profit.
AN Finance Growth and Capital Returns Stay in Focus
AN’s captive finance platform expanded meaningfully and became a larger contributor to profitability. AutoNation Finance income improved to $9.4 million from $0.1 million a year ago, reflecting stronger net interest dynamics and portfolio scaling.
Cash deployment remained shareholder-friendly. Adjusted free cash flow was $255.6 million, and Capital expenditure in the quarter amounted to $56.4 million. Liquidity stood at roughly $1.6 billion at quarter-end, including $66 million of cash and $1.6 billion of available capacity under the revolving credit facility. At the end of the first quarter, non-vehicle debt was $4.12 billion.
During the quarter, the company bought back 1.5 million shares for $300 million. Currently, AN has $685 million remaining under its share repurchase program.
Lithia Motors (LAD - Free Report) posted first-quarter 2026 adjusted earnings of $7.34 per share, down 4% from $7.66 a year ago. However, the bottom line beat the Zacks Consensus Estimate of $7.06 by 4%. Quarterly revenues rose 1% year over year to $9.27 billion but came in below the Zacks Consensus Estimate of $9.36 billion by 0.9%.
As of March 31, 2026, Lithia’s cash, restricted cash and cash equivalents totaled $421.3 million, up from $341.8 million at year-end 2025. The board approved a quarterly dividend of 57 cents per share, expected to be paid on May 22, 2026, to shareholders of record on May 8, 2026.
Penske Automotive Group, Inc. (PAG - Free Report) reported first-quarter 2026 adjusted earnings of $3.05 per share, which declined 15.0% year over year but topped the Zacks Consensus Estimate of $2.91 by 4.8%. Total revenues of $7.86 billion dipped 1.1% from the year-ago quarter and missed the consensus mark of $7.95 billion by 1.1%.
The company paid $92.6 million in dividends and repurchased 170,393 shares for $26.4 million. Liquidity was approximately $1.3 billion, including $83.7 million in cash and $1.2 billion of availability under credit agreements and revolving mortgage facilities. Balance sheet leverage increased, with long-term debt rising to $2.21 billion as of March 31, 2026.
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AutoNation Q1 Earnings Miss Estimates on Soft New-Vehicle Sales
Key Takeaways
AutoNation, Inc. (AN - Free Report) reported first-quarter 2026 adjusted earnings of $4.69 per share, which missed the Zacks Consensus Estimate of $4.71 by 0.43%. Revenues amounted to $6.55 billion, which missed the Zacks Consensus Estimate of $6.66 billion by 1.6%. The top line declined from $6.69 billion reported in the first quarter of 2025.
The results showed a familiar pattern: strong performance in higher-margin businesses was offset by weaker sales volumes and higher costs. Adjusted free cash flow was $255.6 million, with a solid 155% conversion of adjusted net income.
AutoNation, Inc. Price, Consensus and EPS Surprise
AutoNation, Inc. price-consensus-eps-surprise-chart | AutoNation, Inc. Quote
AN’s Top-Line Miss Tied to Lower New-Vehicle Revenues
AN’s consolidated revenues declined as new-vehicle sales softened. New-vehicle revenues fell to $3.01 billion from $3.25 billion a year ago, mainly due to fewer cars being sold and a lower contribution from this segment.
New vehicle retail units sold dropped 7.9% year over year to 57,482 units. The average selling price (ASP) per new vehicle unit retailed was $52,382. Gross profit from the segment was $144.5 million, which declined 17.4% year over year. Gross profit per new vehicle retailed slid to $2,514, indicating profitability pressures in the new-vehicle channel versus the year-ago period.
AN’s Used and F&I Trends Show Resilience Despite Volumes
AN’s used-vehicle results were more stable than new vehicles, helped by pricing and mix. Retail used-vehicle revenues increased 1.5% year over year to $1.82 billion, while used vehicle retail units sold declined 3.2% to 65,818 units. ASP per used vehicle unit retailed totaled $27,646. Gross profit from the segment was $104.9 million. Gross profit per used vehicle retailed totaled $1,594.
Revenues from wholesale used vehicles were up 10.7% to $144.2 million. Gross profit rose to $16.5 million from $11.5 million reported a year ago.
Finance and insurance remained a steady earnings contributor. Finance and insurance, net revenues were essentially flat at $352 million, and gross profit from the segment was $352 million. Gross profit per unit in this category improved to $2,855. Combined with used-vehicle dynamics, these steadier lines continued to support gross profit durability even as total retail units fell.
AutoNation’s After-Sales Business Again Carries the Mix
AutoNation’s parts and service operation delivered the clearest growth signal in the quarter. Parts and service revenues increased 4.9% year over year to $1.22 billion, supported by continued demand for maintenance and repair work.
Profitability remained strong in this area. Parts and service gross profit increased to $593.4 million from $567.7 million last year, making it the biggest contributor to overall profit and helping offset weaker new-vehicle performance.
AN Segment Performance Mixed Across Regions
Revenues from the Domestic segment totaled $1.72 billion. The segment’s income climbed 13.2% to $78.1 million.
Revenues from the Import segment totaled $2.05 billion. The segment’s income declined 9.8% to $113.8 million.
Premium Luxury segment sales fell 5.2% to $2.44 billion. The segmental income declined 13.4% year over year to $154.8 million.
AutoNation’s Expense Profile Pressures Operating Leverage
Gross profit was mostly steady, but costs moved higher. Total gross profit dipped slightly to $1.21 billion from $1.22 billion, while SG&A expenses rose to $842.2 million from $821.9 million, putting pressure on margins.
Operating income fell 6.5% year over year to $314.3 million. On a comparable basis, it declined to $311.7 million, while adjusted SG&A rose to 69.8% of gross profit from 67.5% last year, highlighting higher costs despite only a small change in gross profit.
AN Finance Growth and Capital Returns Stay in Focus
AN’s captive finance platform expanded meaningfully and became a larger contributor to profitability. AutoNation Finance income improved to $9.4 million from $0.1 million a year ago, reflecting stronger net interest dynamics and portfolio scaling.
Cash deployment remained shareholder-friendly. Adjusted free cash flow was $255.6 million, and Capital expenditure in the quarter amounted to $56.4 million. Liquidity stood at roughly $1.6 billion at quarter-end, including $66 million of cash and $1.6 billion of available capacity under the revolving credit facility. At the end of the first quarter, non-vehicle debt was $4.12 billion.
During the quarter, the company bought back 1.5 million shares for $300 million. Currently, AN has $685 million remaining under its share repurchase program.
AN currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Releases
Lithia Motors (LAD - Free Report) posted first-quarter 2026 adjusted earnings of $7.34 per share, down 4% from $7.66 a year ago. However, the bottom line beat the Zacks Consensus Estimate of $7.06 by 4%. Quarterly revenues rose 1% year over year to $9.27 billion but came in below the Zacks Consensus Estimate of $9.36 billion by 0.9%.
As of March 31, 2026, Lithia’s cash, restricted cash and cash equivalents totaled $421.3 million, up from $341.8 million at year-end 2025. The board approved a quarterly dividend of 57 cents per share, expected to be paid on May 22, 2026, to shareholders of record on May 8, 2026.
Penske Automotive Group, Inc. (PAG - Free Report) reported first-quarter 2026 adjusted earnings of $3.05 per share, which declined 15.0% year over year but topped the Zacks Consensus Estimate of $2.91 by 4.8%. Total revenues of $7.86 billion dipped 1.1% from the year-ago quarter and missed the consensus mark of $7.95 billion by 1.1%.
The company paid $92.6 million in dividends and repurchased 170,393 shares for $26.4 million. Liquidity was approximately $1.3 billion, including $83.7 million in cash and $1.2 billion of availability under credit agreements and revolving mortgage facilities. Balance sheet leverage increased, with long-term debt rising to $2.21 billion as of March 31, 2026.