AutoNation top earnings expectations, as big beat in used vehicles offset decline in new vehicles

Shares of AutoNation Inc. rallied 1.3% in premarket trading Thursday, after the auto seller reported first-quarter profit and revenue that rose above expectations, as a big beat in sales of used vehicles offset a slight miss in new vehicles. Net income increased to $362.1 million, or $5.78 a share, from $239.4 million, or $2.85 a share, in the year-ago period. The FactSet consensus for earnings per share was $5.25. Revenue grew 14.4% to $6.75 billion, above the FactSet consensus of $6.51 billion. That outpaced the 11.8% growth in cost of sales, to $5.44 billion. New vehicle sales fell 5.9% to $2.81 billion, missing the FactSet consensus of $2.88 billion, while used vehicle sales jumped 47.1% to $2.57 billion to beat expectations of $2.24 billion. The company said consumer demand for vehicle ownership “remains strong” and its used vehicle business continues to meet that demand. The stock has dropped 9.6% year to date through Wednesday, while the S&P 500 has lost 6.4%.

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