AutoNation CEO: 'Biblical hail' pounded profits

AutoNation reports mixed results: CEO
AutoNation reports mixed results: CEO

AutoNation chief Mike Jackson said Friday the company missed estimates on first-quarter earnings because of "epic, biblical hail storms" last month in Texas.

The nation's largest dealer chain on Friday reported adjusted profit of 90 cents per share, 3 cents short of Wall Street expectations.

Jackson told CNBC's "Squawk Box" that severe damage to vehicles cost 3 cents per share during the quarter.

"We've never called out a hail storm before," he said. "We're fully at our [insurance] deductible. We're beyond that. ... It's a limited number of vehicles but they were just pounded."

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The Insurance Council of Texas, the trade group for property damage there, said the March hail storms caused "over $1 billion in insured losses" across the state.

"The Street doesn't factor in hail storms," Jackson added. "I think it's asking too much for analysts to factor into their number what happens with hail."

He also cited a drag from a stock-based compensation expense.

If not for those hits, AutoNation would have exceeded earnings estimates, he said.

Revenue for the first quarter rose 3.6 percent to $5.12 billion, but fell short of forecasts of $5.29 billion.

"It's a particularly challenging environment" for auto sales, said Jackson, who also blamed a downturn in the economies of regions that depended on oil revenues.

Twenty-five percent of AutoNation's business comes from markets that depend on energy, he said, adding profits in those areas were down 20 percent because of depressed oil prices.