(Reuters) – No. 1 U.S. auto retailer AutoNation Inc beat Wall Street estimates for fourth-quarter profit and revenue on Thursday on robust demand for used vehicles boosted by consumer preference for personal transportation due to the COVID-19 pandemic.
Shares of the company up 3.04% at $114.5 in premarket trading.
The results cap off a year of breakneck profit growth for the auto retail industry, with sales surging as consumers, flush with cash, scramble to buy cars at record high prices.
“We expect consumer demand for personal vehicle ownership to remain strong for the foreseeable future,” Mike Manley, who took over as AutoNation’s chief executive officer on Nov. 1, said in a statement.
Demand for private vehicles was fueled by massive stimulus as well as low interest rates during the pandemic. That sent average vehicle transaction prices to record highs last year, according to auto industry consultants.
AutoNation said incoming new vehicle inventory, for the most part, had already been preordered by customers.
The company said retail gross profit per used vehicle was $2,063 in the quarter, up 32% from the year-ago quarter, while retail gross profit per new vehicle was $6,450, up 132% from last year.
Excluding items, it earned $5.76 per share, beating estimates of $4.96 per share, according to Refinitiv IBES data.
The Fort Lauderdale-based company said revenue from the sale of used vehicles rose 55% from a year earlier.
However, retail unit sales of new vehicles fell 20% in the quarter ended Dec. 31.
Net income rose to $387.1 million, or $5.87 per share, in the quarter, from $151.5 million, or $1.73 share, last year.
AutoNation’s revenue rose 13.8% to $6.58 billion, compared to estimates of $6.37 billion.
(Reporting by Kannaki Deka in Bengaluru and Joseph White in Detroit; Editing by Amy Caren Daniel)
