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AutoNation (AN) Q1 Earnings Beat Estimates, Revenues Miss

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AutoNation Inc. (AN - Free Report) reported adjusted earnings of $1.05 per share, beating the Zacks Consensus Estimate of 92 cents. In the year-ago quarter, the bottom line was $1.01 per share.

Net income from continuing operations was $92 million compared with $93 millionin first-quarter 2018.

During the quarter under review, AutoNation’s revenues were $4.98 billion compared with $5.26 billion in the prior-year quarter. The top line also missed the Zacks Consensus Estimate of $5.22 billion.

AutoNation, Inc. Price, Consensus and EPS Surprise

 

During the reported quarter, new-vehicle revenues decreased 10.3% year over year to $2.5billion. Used-vehicle revenues rose 1.4% to $1.3 billion from the year-ago figure. The parts and service business’s revenues gained 2.4% to $859 million from first-quarter 2018. Net revenues from the finance and insurance business were $234 million, reflecting decline of 1% from the prior-year quarter.

Segmental Details

Revenues at the Domestic segment — comprising stores that sell vehicles manufactured by General Motors, Ford and FCA US — declined 11.6% to $1.6 billion. The segment’s income decreased 6.8% to $56 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 — declined 9.5% to $1.5 billion. Further, the segment’s income lost 0.3% to $73 million in the reported quarter.

Revenues at the Premium Luxury segment comprise stores that retail vehicles manufactured by Mercedes-Benz, BMW, Lexus and Audi. The sales figure increased 0.9% to $1.7 billion. Segmental income declined 3.9% to $84.3 million in the reported quarter.

Balance Sheet and Capex

AutoNation’s cash and cash equivalents were $48.7million as of Mar 31, 2019, declining from $57.5 million as of Mar 31, 2018. The company’s inventory was valued at $3.8 billion as of Mar 31, 2019, compared with $3.5 billion recorded in the prior-year period.

At the end ofthe first quarter of2019, non-vehicle debt was $2.4 billion compared with $2.6 billion in first-quarter 2018. At the quarter end, capital expenditure was $40.4 million compared with $79.4 million in the prior-year quarter.

Share Repurchase

During the first quarter, AutoNation bought back 1 million units of common stock for $34 million. As of Apr 24, 2019, it hadroughly $230 million remaining under the current authorization for share repurchase and 89 million shares outstanding.

Zacks Rank & Stocks to Consider

AutoNation currently carries a Zacks Rank #5 (Strong Sell). A few better-ranked stocks in the auto space are PACCAR, Inc. (PCAR - Free Report) , SPX Corporation (SPXC - Free Report) and AB Volvo (VLVLY - Free Report) . PACCAR and SPX Corp currently carry a Zacks Rank #2 (Buy), while Volvo sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PACCAR has an expected long-term growth rate of 8.4%. The company’s stock has seen the Zacks Consensus Estimate for earnings in 2019 being revised 0.16% upward over the past 30 days.

SPX Corp has an expected current-year growth rate of 18.2%. The company’s stock has seen the Zacks Consensus Estimate for earnings in 2019 being revised 0.39% upward over the past 30 days.

Volvo has an expected long-term growth rate of 5%. The company’s stock has seen the Zacks Consensus Estimate for earnings in 2019 being revised 8.1% upward over the past 30 days.

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