Shares of AutoNation Inc (NYSE: AN) opened 12% up on Thursday after the automotive retailer reported market-beat results for its fiscal third quarter.
Highlights from CEO Jackson’s interview with CNBC’s ‘Squawk Box’
On CNBC’s “Squawk Box”, CEO Mike Jackson agreed that meeting strong demand amidst supply crunch was a challenge but said AutoNation had planned for it beforehand.
We aggressively acquired pre-owned the minute that the auto factories shut down due to COVID, realising that our customers would be willing to buy nearly new because the demand for automobiles increased significantly already in April 2020. Evidently, our strategy performed well.
According to Jackson, Q3 marked the sixth consecutive “record” quarter for AutoNation. But he’s still convinced that demand will keep up in 2022 as well.
We have many customers who plan on buying next year. So, when production gets back to a normal level, I don’t see that going into inventory. We’re pre-selling what’s scheduled to be produced. They’re coming in and going right out.
Key takeaways from AutoNation’s Q3 results
AutoNation said its net income nearly doubled to $361.7 million in Q3. On a per-share basis, it earned $5.12 versus the year-ago figure of $2.05. The Florida-based company generated $6.379 billion in revenue – an increase from $5.405 billion last year.
According to FactSet, experts had forecast $4.20 of EPS on $6.291 billion in revenue. Other notable figures include a 67% year-over-two-year growth in revenue from used vehicles. New vehicle revenue, however, was down 3.0% compared to before the pandemic (Q3 of 2019).
AutoNation repurchased 11% of its outstanding shares in the third quarter for a total of 27% in the trailing 12 months, as per the earnings press release.
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