AutoNation Posts Solid Q3 and Takes Aim at Driverless-Car Business

Investors weren't quite sure what to expect from AutoNation's (NYSE: AN) third quarter. Hurricane Irma was due to negatively impact its results, and light-vehicle sales have been slowing in 2017. Despite those headwinds to its total revenue, the company's bottom line surged past estimates, and its announced partnership with Waymo, Alphabet's (NASDAQ: GOOGL) (NASDAQ: GOOG) self-driving technology company, was enough to send shares up more than 15% Thursday. Let's dig into the financial highlights and what the partnership with Waymo means.

AutoNation's revenue checked in at $5.43 billion during the third quarter, missing analysts' estimates calling for $5.57 billion. And despite investors' concerns about negative impacts from hurricane Irma -- which decreased net income by roughly $8 million after tax, or $0.08 per share -- the dealership group's adjusted earnings per share reached $1.08, which was well above analysts' estimates calling for $0.84.

Other third-quarter highlights include a 2% increase in AutoNation's retail vehicle units, on a same-store basis, and a 9% increase in same-store used-vehicle gross profit. The dealership group also continued to return value to shareholders through share buybacks during the third quarter, repurchasing 9.2 million shares, or 9% of June 30, 2017, shares outstanding, for $400 million.

Continue reading

Source: Fool.com