AutoNation has deal with self-driving tech firm

FORT LAUDERDALE — AutoNation was riding high throughout Thursday, as its stock soared by $7.05 or 14.8 percent to $54.65 a share.

Investors liked two announcements: a deal with Google-parent Alphabet’s selfdriving technology company, and the auto retailer’s third-quarter earnings of $1 a share, which beat analysts’ estimate of 84 cents.

“[Waymo] has a vision of a shared vehicle that is operating autonomously, but at the highest level of safety. I believe Waymo is the leader in this ambition to have a shared autonomous vehicle in the marketplace,” said AutoNation CEO Mike Jackson on a conference call with Wall Street analysts Thursday.

Jackson said the agreement gets AutoNation in on the ground floor of shared autonomous vehicles.

“I look at this and say I want to be part of it, and I want AutoNation to be part of it. When I look at the future of mobility, it will revolve around sharing. We think we can play a vital role in that,” he told analysts, who seemed intrigued by the deal.

The nation’s largest retailer’s multiyear agreement will support Waymo’s autonomous vehicle program to maximize the life of Waymo’s vehicles across the nation. AutoNation stores will provide long-term vehicle maintenance and repairs for Waymo’s self-driving Chrysler Pacifica hybrid vehicle fleet, and will expand with Waymo as they add brands.

Waymo CEO John Krafcik said AutoNation “will help assure that Waymo vehicles are always in top condition as we bring fully selfdriving cars to the public.”

Jackson said experiencing two major hurricanes in two markets were “unprecedented,” but that even with all that disruption, samestore sales were up.” Hurricane Harvey swept through Houston in August and Hurricane Irma through Florida in September.

AutoNation said Hurricane Irma negatively impacted third-quarter earnings by about $8 million, or 8 cents a share, which also was less than expected. Stores were closed for some days both before and after the storm, and those sales won’t come back, the company said.

But despite flooding and other damage in Texas from Hurricane Harvey, new vehicle sales rebounded quickly from that storm, AutoNation executives said on the conference call.

AutoNation reported thirdquarter net income from continuing operations of $98 million, or $1 a share, compared with $107 million, or $1.05 a share, in the same quarter in 2016. Quarterly revenue was $5.4 billion compared with $5.6 billion a year ago.

Retail vehicle unit sales were up 1 percent, or up 2 percent on a same store basis, compared to the yearago period, the company said.

Same store used vehicle gross profit was up 9 percent compared to the same period a year ago, AutoNation said.

AutoNation has had an eventful year that has included its stores affected by two hurricanes, Harvey in Texas and Irma in Florida; resignation of president William Berman, and rollout of a new strategy focused on used car sales.

In 2016, the company announced it is investing $500 million in 2017 and 2018 to leverage its nationwide brand through opening AutoNation USA used-car stores, collision centers and auction houses.

“I look at this ... and I want AutoNation to be part of it.” Mike Jackson, AutoNation CEO

PAUL SANCYA/AP Waymo CEO John Krafcik said AutoNation “will help assure that Waymo vehicles are always in top condition as we bring fully self-driving cars to the public.”

Jackson