AutoNation (AN) showed a 55% increase in profits to $58 million or 34 cents per share in the first quarter of 2010 from $40 million or 22 cents per share in the prior-year quarter. With this, the automotive retailer has met the Zacks Consensus Estimate exactly.
 
Revenues in the quarter appreciated 19% to $2.8 billion, driven by a marked improvement of 24% in the new and used retail vehicle revenues. New retail vehicle revenue escalated 24% to $1.47 billion. This translated into revenue per vehicle of $32,253, an increase of 4% from the year-ago level.
 
The retailer’s new vehicle sales rose 19% to 45,438 units. The increase in unit sales was higher than the industry new retail vehicle unit sales by 4 percentage points, as per CNW Research data.
 
Used retail vehicle revenue went up 23% to $646 million. Used retail vehicle sales rose 11.5% to 37,773 units, transforming into per-vehicle revenue of $17,102, an increase of 10.5%.
 
Revenues in the parts and services business advanced 1% to $540 million, while in the finance and insurance business rose 25% to $96 million. Wholesale revenue increased 34% to $89 million.
 
Segment Performance
 
Revenues in the Domestic segment — comprising stores that sell vehicles manufactured by General Motors, Ford (F) and Chrysler — advanced 18% to $915 million. Unit sales rose 23% to 13,681 vehicles. Segment operating income improved to $31.5 million from $22 million in the first quarter of 2009.

Revenues in the Import segment – comprising stores that sell vehicles manufactured primarily by Toyota (TM), Honda (HMC) and Nissan (NSANY) — went up 21% to $1.08 billion. Unit sales increased 20% to 23,994 vehicles. Segment operating income rose to $50 million from $29.5 million in the first quarter of 2009.

Revenues in the Premium Luxury segment — comprising stores that sell vehicles manufactured primarily by Mercedes, BMW and Lexus — escalated 17% to $823 million. Unit sales rose 9% to 7,763 vehicles. Segment operating income increased to $47 million from $41 million in the first quarter of 2009.

Financials

AutoNation’s cash and cash equivalents improved to $161 million as of March 31, 2009 from $62 million as of March 31, 2009, driven by structural cost reductions. In 2009, capital expenditures reduced to $14 million from $20 million in the prior year.

AutoNation had long-term debt of $1.17 billion as of March 31, 2009. This translated into a long-term debt-to-equity ratio of 33% as of the same period.

AutoNation repurchased 2.1 million shares of common stock in the quarter for an aggregate purchase price of $37.2 million, reflecting an average purchase price of $17.71.
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