AutoNation Almost Doubles Third Quarter Net Profit to Acquire Priority 1 Automotive
Automotive retail giant AutoNation Inc. has announced that it will acquire Priority 1 Automotive Group as it reported record third quarter results that saw its bottom line nearly double, supported by vehicle sales and revenues. used vehicles and a record gross profit per unit for new vehicles.
The nation’s largest new vehicle retailer said Thursday it posted third-quarter net profit of $ 361.7 million, up 98% from the $ 182.6 million earned a year earlier. Revenue jumped 18 percent to $ 6.38 billion even as new vehicle sales fell 12 percent.
“Demand continues to exceed the supply of new vehicles,” AutoNation outgoing CEO Mike Jackson said in a statement. Former Fiat Chrysler Automobiles CEO Mike Manley is expected to take the helm of AutoNation on November 1.
AutoNation said the day supply of new vehicles was only 10 days at the end of September. A year earlier, he was 43.
“New vehicle sales are constrained by reduced production volume with low inventory levels,” Jackson said. “We expect this pent-up demand to support sales for the foreseeable future.”
AutoNation said it has signed a deal and hopes to complete the Priority 1 deal by the end of the fourth quarter, pending approvals from the manufacturer and others. The acquisition is expected to generate approximately $ 420 million in annual revenue.
At the end of September, AutoNation purchased 11 dealerships and an auto body shop from the Peacock Automotive Group under a deal originally announced in April. These stores are expected to generate $ 380 million in annual revenue.
The retailer opened a used-vehicle AutoNation USA store in Northglenn, Colo., Also in September, and this week opened one in Littleton, Colo., The third of five AutoNation USA outlets it plans to have. open this year. Additional sites are planned in Phoenix and Charlotte, North Carolina. The group wants to expand AutoNation USA to more than 130 sites by the end of 2026.
This week, the company said in a regulatory filing that it plans to sell 17 of its crash centers – about a quarter of its number – to Caliber Holdings in a deal expected to be reached by the end. of the year.
Meanwhile, during the third quarter, AutoNation spent $ 879 million to buy almost 11% of its own shares, while the board authorized $ 1 billion in buybacks.
AutoNation Actions rose 7.7 percent to close Thursday at $ 126.
Q3 turnover: $ 6.38 billion, up 18% from a year ago
Q3 net income: $ 361.7 million, up 98% from $ 182.6 million earned a year earlier
Vehicle sales in Q3: 135,830 combined sales of new and used vehicles, up 4%
Recordings: Gross profit per vehicle of the same store of $ 5,484 and gross financing and insurance margin of the same store per vehicle of $ 2,573
AutoNation, of Fort Lauderdale, Fla., Ranks # 1 on Automotive Newslist of the top 150 US-based dealer groups, retailing 249,654 new vehicles in 2020.