AutoNation (AN) Lags Earnings Estimates In Q4, Stock Down
Zacks Investment Research | Feb 24, 2019 08:03PM ET
Shares of AutoNation Inc. (NYSE:AN) have lost 3% in a day’s trading, following the fourth-quarter and 2018 earnings release. During the quarter under review, the company reported adjusted earnings of $1.10 per share, missing the Zacks Consensus Estimate of $1.14. In the year-ago quarter, the bottom line was $1.64 per share.
Net income from continuing operations was $93 million compared with $152 million in fourth-quarter 2017.
During the quarter under review, AutoNation’s revenues were $5.41 billion compared with $5.68 billion in the prior-year quarter. The top line also missed the Zacks Consensus Estimate of $5.61 billion.
During the reported quarter, new-vehicle revenues decreased 8.3% year over year to $3.07 billion in fourth-quarter 2018. Used-vehicle revenues rose 0.4% to $1.21 from the year-ago figure. Parts and service business revenues gained 1.6% from fourth-quarter 2017to $868 million. Net revenues from the finance and insurance business were $245 million, reflecting a decline of 0.7% from the prior-year quarter.
2018 Results
In 2018, the company recorded net income from continuing operations of $396 millionor $4.34 per share compared with $435 million or $4.43 per share in the prior year.
Revenues for the year were $21.4 billion, marking a slight decline from $21.5 billion in 2017.
Segmental Details
Revenues at the Domestic segment — comprising stores that sell vehicles manufactured by General Motors, Ford and FCA US — declined 7.9% to $1.75 billion. The segment’s income decreased 17.9% to $55 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 — decreased5.9% to $1.6 billion. Further, the segment’s income lost 8.9% to $68.5 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 fell 2.3% to $1.9 billion. Segmental income declined 13.4% to $91.4 million in the reported quarter.
Balance Sheet and Capex
AutoNation’s cash and cash equivalents were $48.6 million as of Dec 31, 2018, declining from $69 million as of Dec 31, 2017. The company’s inventory was valued at $3.6 billion as of Dec 31, 2018, almost in line with the figure recorded as of Dec 31, 2017.
At the end of 2018, non-vehicle debt was $2.6 billion compared with $2.7 billion in 2017. At the end of fourth-quarter 2018, capital expenditure was $122 million compared with $108 million in the prior-year quarter.
Other Announcements
On Feb 22, AutoNation announced that Carl Liebert was appointed as its new chief executive officer and president, effective Mar 11, 2019. Further, Liebert will assume the role of one of AutoNation's board of directors, effective Mar 11, 2019.
Zacks Rank and Stocks to Consider
AutoNation currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are General Motors Company (NYSE:GM) , Honda Motor Co., Ltd. (NYSE:HMC) and Oshkosh Corporation (NYSE:OSK) , each currently carrying a Zacks Rank #2 (Buy). You can see Zacks Investment Research
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