After the nation’s largest seller of new vehicles posted its sixth straight quarterly earnings record, AutoNation’s stock hit a new all-time high of more than $130 a share on Thursday.
Due to a persistent global shortage of semiconductor chips, AutoNation surpassed Wall Street’s profit and sales projections, owing to resilient customer demand surpassing vehicle supplies, resulting in record car prices and profits.
On Thursday morning, shares of the Florida-based dealership group soared as much as 12% before settling at around $124 per share, up roughly 6%. This year, AutoNation’s stock has increased by roughly 70%.
According to Refinitiv, the business recorded adjusted earnings per share of $5.12 in the third quarter, an all-time high, exceeding analysts’ expectations of $4.20 per share. AutoNation’s revenue for the quarter increased by 18% to $6.38 billion, beating analyst expectations of $6.31 billion.
AutoNation recorded a net profit of $361.7 million, nearly double the $182.6 million it made the year before.
“We are preselling what’s being scheduled to be produced,” AutoNation CEO Mike Jackson said Thursday on CNBC’s “Squawk Box.” “They’re coming in and going right out … the demand is there.”
AutoNation also announced an acquisition that is estimated to generate $420 million in yearly revenue, in addition to the record profitability. AutoNation’s board of directors also approved the repurchase of up to $1 billion in common stock.
In the third quarter, AutoNation announced that it will repurchase 7.9 million shares of common stock, or 11 percent of the company’s outstanding stock, for an aggregate purchase price of $879 million.
AutoNation’s profits were boosted by a 53 percent increase in used vehicle sales over the previous year, while new vehicle sales remained steady.
The company recorded a record $5,484 in same-store new gross profit per new vehicle, up $2,949. According to the firm, gross profit per used vehicle was $2,104, up $108 from a year ago and up 51% from the third quarter of 2019.