AutoNation First-Quarter Profit Dips; Key Markets Weaken
Car dealership chain AutoNation on Thursday said quarterly profit fell, hurt by higher interest expense and weaker demand for new vehicles in the key markets of California and Florida.
The largest U.S. automotive retailer said first-quarter net income fell to $77.6 million from $87.2 million a year earlier.
Earnings per share, however, rose to 37 cents a share from 33 cents a share a year earlier, boosted by a share buyback.
Income from continuing operations was 39 cents a share.
Analysts, on average, expected 40 cents a share, according to Reuters Estimates.
AutoNation said weak housing markets in California and Florida, which account for about 50% of the company's new-vehicle sales, were a "big factor" in hurting net income.
"It is a very challenging economic environment for new-vehicle sales, driven in large part by continued softening in the housing market and higher interest rates, especially in California and Florida," Chief Executive Mike Jackson said.
Industry new-vehicle retail sales fell about 13% in California and Florida in the first quarter, according to data from CNW Research data. AutoNation said that drop was "in line" with its decline in those markets.
Total revenue fell 3.8% to $4.4 billion, reflecting a 6.2% decline in new-vehicle sales and a 2.1% drop in used-vehicle sales.
Analysts had expected revenue of $4.6 billion.