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.

Also, the company has been aggressively buying back its own shares in the open market, reducing its amount of shares outstanding.

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.

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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:

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.

Other News About AN
AutoNation's CEO Discusses Q4 2011 Results - Earnings Call Transcript
Transcript of earnings conference call on January 26th of 2012.
AutoNation Announces Additional $250 Mln Stock Buyback Authorization
AN authorizes buying back more shares of its own stock. Other Stocks in the News
Facebook Hits Back, says Yahoo Infringed Patents
Facebook alleges Yahoo infringed on patents, the same accusation made by Yahoo.
GE Downgraded by Moody's
Moody's downgrades GE and its financing subsidiary.

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Published on Apr 4, 2012
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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