US car dealer group AutoNation today said it earned record fourth-quarter income before charges of $US0.22 per share, or $72.2 million, that exceeded year-ago earnings of $0.17 per share, or $61.2 million, by 29 percent before one-time items.

The results came on record fourth-quarter revenue of $5.1 billion, an increase of 10 percent from year-ago revenue of $4.7 billion. Before one-time items, the company also generated record fourth-quarter earnings before interest, taxes, depreciation and amortisation (EBITDA) of $169.7 million, an increase of 25 percent from year-ago EBITDA of $135.6 million.

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Total same-store revenue grew by 11 percent and the company said a 13% increase for new vehicles, a 12% increase for used vehicles, a 28% increase for finance and insurance products, and a 5% increase
for parts and service drove the growth.

The higher-margin areas of used vehicles, finance and insurance, and parts and service also accounted for 67% of the Company’s gross margin during the quarter.

Charges taken during the fourth quarter included a previously announced non-cash, pre-tax charge of $85.8 million ($52.3 million, after tax, or $0.16 per share) to increase reserves for vehicle loans and to cover costs from exiting that business.

AutoNation’s dealerships continue to offer consumer loans through third parties.

There was also a $20 million charge ($12.7 million, after tax, or $0.04 per share) included in net income from discontinued operations. The charge relates to the assumption of certain obligations of ANC Rental Corp., AutoNation’s former vehicle rental business that recently declared bankruptcy. This and other actions have reduced the company’s remaining potential financial exposure related to ANC Rental to an estimated pre-tax range of $25 million to $60 million.

Including these charges, AutoNation reported fourth-quarter net income of $6.9 million, or $0.02 per share, on revenue of $5.1 billion compared to net income a year ago of $73.7 million, or $0.21 per share, on revenue of $4.7 billion.

The earnings in the year-earlier period included $0.04 per share of net gain from one-time items.

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