FORT LAUDERDALE – AutoNation, Inc. (NYSE:AN) reported its fourth quarter 2023 results with an adjusted EPS of $5.02, surpassing the analyst consensus estimate of $4.89. The automotive retailer's revenue for the quarter was $6.8 billion, also exceeding the consensus estimate of $6.68 billion and marking a 1% increase from the same quarter last year.
The company's performance in the fourth quarter was bolstered by strong new vehicle unit sales and a significant rise in after-sales revenue, which grew by 11% YoY to $1.1 billion. Despite a decrease in used vehicle revenue by 12%, the company's new vehicle revenue saw a 7% increase, amounting to $3.4 billion.
The CEO of AutoNation, Mike Manley, attributed the robust results to the company's dynamic business model and the dedication of its associates to delivering an exceptional customer experience.
However, the company's gross profit saw a downturn, falling to $1.2 billion, a decrease from the previous year's $1.3 billion. This decline was partly due to a reduction in new vehicle gross profit, which dropped by $102 million, reflecting a lower gross profit per vehicle retailed, despite an 8% rise in unit sales.
Similarly, used vehicle gross profit decreased by $27 million, with a 4% dip in unit sales.
AutoNation's stock experienced a positive movement following the earnings release, with a 1.7% increase, indicating a favorable market response to the company's financial performance.
Looking ahead, the company remains confident in its business model and its ability to generate strong cash flow while maintaining a focus on executing its operating plan and maximizing shareholder returns. With a continued normalization of vehicle supply and demand dynamics anticipated in 2024, AutoNation is poised to navigate the evolving market with its robust balance sheet and strategic capital allocation.
InvestingPro Insights
AutoNation, Inc. (NYSE:AN) has shown resilience in its fourth quarter of 2023 performance, with a noteworthy adjusted EPS that exceeded analyst expectations. This positive outcome aligns with the recent InvestingPro Tips highlighting that management has been actively repurchasing shares, which can often signal confidence in the company's future prospects. Additionally, with three analysts revising their earnings upwards for the upcoming period, there appears to be an optimistic outlook on the company's financial trajectory.
The InvestingPro Data further sheds light on AutoNation's market position. With a P/E Ratio (adjusted for the last twelve months as of Q3 2023) at a low 6.08, the company trades at an attractive earnings multiple compared to its historical performance. The Revenue Growth for the same period shows a modest 0.03% increase, which, while slight, indicates stability in the company's revenue stream.
Moreover, AutoNation has demonstrated a strong return over the last three months, with a 16.28% price total return, reflecting the market's positive reception to the company's strategic initiatives and operational execution. This short-term performance is a testament to the company's ability to adapt and thrive in a competitive industry.
Investors looking for further insights and additional InvestingPro Tips can find them on https://www.investing.com/pro/AN, where there are 11 more tips available. These insights can be particularly valuable for those considering an investment in AutoNation. To gain access to these tips, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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