AutoNation revenue up 2 percent

Earnings decline on store investments

AutoNation’s used-car focus and one-price strategy is working, CEO Mike Jackson said Tuesday, after the Fort Lauderdale-based company’s announcement of a first-quarter revenue increase of 2 percent and same-store gross profits up 9 percent.

Total revenue was $5.3 billion compared with $5.1 billion. Samestore gross profit of $825 million increased by 3 percent compared with the year-ago period, driven by a 9 percent increase in used vehicle gross profit, AutoNation said.

But net income for the quarter was $93.1 million compared with $98.1 million.

During a conference call with analysts, Jackson said the auto retailer had record per-share earnings but that overall earnings were down due to “significant cost investments” as AutoNation opens new used-car stores, auction and repair shops.

“We are focused on the long term. That’s why we took the risk,” Jackson said.

Now that AutoNation has five USA stores, the company will “decide when and how many USA stores to build” later this year, he said.

Earnings per share from continuing operations was $1.01 compared with 97 cents in the same quarter a year ago, AutoNation said. Per-share results were expected to be higher due to share repurchases in the quarter, according centers to a Wells Fargo Securities report.

While earnings were in line, sales fell slightly short of Wall Street analysts’ expectations.

Same-store revenue — that of stores open at least a year — was $5.2 billion, an increase of 3 percent compared with a year ago.

Income from domestic vehicle sales was $60 million compared wth $61 million a year ago, while import segment income increased 2 percent to $73 million, and premium luxury vehicle income increased 9 percent to $88 million, AutoNation said.

On Tuesday, the company also announced it has been awarded Jaguar Land Rover luxury franchises to be located in Florida, California, Texas and Maryland. Anticipated annual revenues of eight dealerships in four locations are about $400 million once fully operational, AutoNation said. One store is planned in Delray Beach, Jackson said.

AutoNation’s stock closed at $46.52, up 33 cents or 0.71 percent Tuesday on the New York Stock Exchange.

mpounds@sunsentinel.com