AutoNation Gearing Up For Q3 Results

(RTTNews) - America's largest automotive retailer AutoNation Inc. (AN) is set to release its third-quarter numbers on Wednesday, October 28. Earnings per share is estimated to be $1.05 on revenue of $5.36 billion for the quarter, according to Thomson Reuters analysts.

Reported retail new vehicle unit sales in the third quarter of 2015 were 89,953, an increase of 7% as compared to the third quarter of 2014. On a same-store basis, reported retail new vehicle unit sales in the third quarter of 2015 grew 5% versus last year.

The Domestic segment's retail new vehicle unit sales rose 13% to 29,202 units, the Import segment's sales edged up 1% to 42,668, and the Premium Luxury segment's sales grew 14% to 18,083 units.

The company believes that the auto industry remains healthy and reconfirmed its 2015 sales forecast of 17 million units.

AutoNation remains committed to driving company value and shareholder returns through disciplined capital allocation as it continues to invest in strategic digital initiatives, acquisitions and opportunistic share repurchase.

During The Third Quarter...

September 11, AutoNation's Board of Directors authorized the repurchase of up to an additional $250 million of the company's common stock. With the increased authorization, AutoNation has about $338 million total Board authorization remaining for share repurchases as of September 11, 2015. AutoNation has about 111 million shares outstanding as of September 11, 2015.

September 16, AutoNation announced the pricing of $300 million aggregate principal amount of senior unsecured notes due 2021 at 3.35% and $450 million aggregate principal amount of senior unsecured notes due 2025 at 4.5%. The company intends to use the net proceeds from the offering of the notes to reduce borrowings under the company's existing revolving credit facility and for general corporate purposes.

August 18, AutoNation signed agreements to acquire 13 stores in Georgia, Alabama and Tennessee from Carl Gregory Enterprises and 3 stores in the Baltimore, Maryland market from Valley Motors Auto Group representing over $600 million in combined annual revenue. Once the transactions are completed, AutoNation's total franchise count will be 327 franchises, an increase of 34 franchises.

In 2014, the Carl Gregory stores retailed about 16,750 new and used vehicles. The Valley Motors Auto Group stores retailed about 2,900 new and used vehicles in 2014.

Q2 - 19th Consecutive Quarter Of Double-Digit EPS Growth

The company has recorded double-digit earnings per share growth for nineteen consecutive quarter, reflecting growth across all its business sectors. Also, the company reported all-time records in total gross profit, used vehicle revenue, customer care revenue, and customer care gross profit.

Second quarter 2015 net income rose to $115.1 million or $1.00 per share, from $100.4 million or $0.83 per share in the prior year.

Net income from continuing operations was $115.2 million, a record for second quarter results, or $1.00 per share, compared to $100.7 million or $0.83 per share, for the same period of prior year, a 20% improvement on a per-share basis.

Analysts polled by Thomson Reuters expected the company to report earnings of $1.02 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue totaled $5.22 billion, up 9% from $4.79 billion in the prior year, while nine analysts had a consensus revenue estimate of $5.25 billion for the quarter. The increase was driven by stronger performance in all business sectors - new vehicles, used vehicles, parts and service, and finance and insurance.

In the second quarter of 2015, AutoNation's retail new vehicle unit sales increased 6% overall and 4% on a same store basis, while retail used vehicle unit sales increased 9% overall and 7% on a same store basis.

Mike Jackson, Chairman, Chief Executive Officer and President said, "AutoNation delivered its 19th consecutive quarter of double-digit year-over-year growth in EPS. We reconfirm our expectation of U.S. industry new vehicle unit sales to be above 17 million units in 2015."