AutoNation (AN) Up on Stronger New Auto Sales
Shares of AutoNation Inc. (AN: Charts, News) rose on Tuesday after the company reported significantly stronger than expected sales of new cares in March. AutoNation stock closed at $34.85 per share, up +0.07 or 0.20%, after having traded as high as $35.85 earlier in the session.
AutoNation has been steadily selling more cars as the economy begins to pick up and as all three major U.S. car manufacturers begin selling more cars.
Tuesday, the company reported its retail unit sales in March had increased by 15 percent, compared to its sales in March of 2011. AutoNation said it had sold a total of 25,489 new vehicle units in the month. For the first quarter of 2012, the company's new unit vehicle sales increased by 13% overall from the same period a year ago.
Sales for the first quarter increased by +17 percent for Domestic cars, +12 percent for Imports and +12 percent for Premium Luxury cars, all increases were in comparison to the first quarter of 2011.
AutoNation prides itself in being a transforming force in the retail automotive industry, delivering a customer focused sales experience through its 260 new vehicle franchises. The company, which owns and operates its franchises, sells 32 brands of automobiles in 15 states.
Being the largest automotive retailer in the nation, AutoNation uses state of the art technology for its operations and is particularly well suited to benefit clients through leveraging economies of scale, passing down savings from its operations to customers.
The 25,489 new vehicle units sold by AutoNation in March break down as follows:
- 7,991 for Domestic autos, a 26 percent increase from March 2011
- 4,095 for Premium Luxury autos, a 10 percent increase from March of 2011
- 13,403 for Imports, a 10 percent increase from March of 2011
In addition to increased sales in the first quarter, the company has been actively involved in buying back its own shares. Last week, the firm announced it had authorized the repurchase of up to another $250 million of the company's common stock.
The company had already maxed out and used all of the amounts previously approved under its share repurchase program before the new authorization. In 2011, AutoNation repurchased 17.1 million of its own shares, or $583 million, at an average price of $34.14 per share.
In the period between January 1st and January 25 of 2012, the company repurchased another 3.5 million shares, or $122 million at an average price of $34.74 per share. As of March 23rd, 2012, the company had approximately 124.6 million shares outstanding.
Earnings for the company have also been improving, with 2011 fourth quarter earnings, which were out on January 26th, showed the company had earned $0.51 per share, compared to $0.45 for the same period a year ago. Revenue for the fourth quarter was also impressive, totaling $3.7 billion, versus $3.2 billion a year ago.
With improving earnings and increased sales of automobiles reported by all the major car manufacturers, AutoNation stock might be ready to make a move on the upside. In addition, the fact that the company is buying back as many of its shares as it possibly can, is generally a good indication that the company has a high level of confidence in its own future.
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