US: AutoNation back in black on lower sales

29 October 2009 | Source: just-auto.com editorial team

Dealer group AutoNation on Thursday announced third quarter net income of US$65m ($0.36 a share) compared to a net loss of $1.4bn (-$7.90 a share) a year ago.

Chairman and CEO Mike Jackson said: "AutoNation delivered solid profitability driven by margin recovery, cost reduction, lower interest expenses, a disciplined operating model and inventory management.

"Our third quarter profitability improved from third quarter 2008 despite substantially lower new vehicle industry volume compared to last year.

"Cash for clunkers was a highly effective stimulus programme that provided a much needed lift in auto sales and has set the stage going forward for a gradual recovery of new vehicle sales. The programme aided our third quarter results by an estimated 7 cents per share."

Jackson added: "We expect that the automotive retail market will remain challenging throughout the remainder of 2009 with a gradual recovery beginning in 2010.

We are optimistic for the long term prospects of the auto industry based on the successful restructuring of the domestic auto industry, the move to a demand pull system, and the rationalisation of the dealer network."
Q3 2009 revenue was $2.9bn versus $3.4bn as vehicle sales fell.

For the nine months to 30 September, the dealer group reported net income of $172m ($0.96 a share), compared to a net loss of $1.29bn (-$7.22 a share) in 2008.

Revenue was down 26% to $7.9bn.

Dealer outlook cautious