AutoNation revenue nearly triples as chip scarcity boosts automobile costs By Reuters
© Reuters. Autos on the market are pictured on the lot at AutoNation Toyota dealership in Cerritos
(Reuters) – AutoNation Inc (NYSE:) on Tuesday reported quarterly adjusted revenue that just about tripled from final yr because the U.S. auto retailer benefited from larger earnings per automobile, amid a world chip scarcity that has compelled automakers to chop manufacturing and lift costs.
Low rates of interest and shoppers’ desire for personal autos over public transportation has helped demand at U.S. auto sellers in the course of the COVID-19 pandemic, whereas a semiconductor chip scarcity has created a provide crunch.
“Demand continues to exceed provide for brand new autos, and we anticipate this to proceed all through 2021, partly because of the manufacturing disruption,” Chief Government Officer Mike Jackson stated.
AutoNation’s gross revenue per new automobile at shops which have stayed open for not less than a yr jumped 61% to $2,739 within the first quarter from a yr earlier. The corporate’s gross revenue per used automobile jumped 17% to $1,744.
On the similar time, Jackson stated AutoNation saved overhead prices down utilizing digital gross sales techniques. Overhead prices had been 62.7% of income, down 11.2 share factors from a yr earlier.
To this point, Jackson informed Reuters, diminished inventories weren’t chopping into gross sales. As a substitute, automakers are chopping manufacturing of slow-selling autos, and people autos that arrive at AutoNation shops “are going proper out the door,” Jackson stated.
“For first time there’s dialog with producers that this can be a greater approach to run the trade,” Jackson stated.
AutoNation stated in the course of the first quarter, it purchased 11 shops and a collision middle from Peacock Automotive Group, including $380 million in annual income. Jackson stated he expects extra consolidation amongst U.S. auto sellers as extra automobile purchases transfer on-line.
“Solely the most important teams can construct proprietary digital instruments. That is robust to compete towards,” Jackson stated. “You are going to see fairly quite a lot of acquisitions ..not simply by us.”
Fort Lauderdale-based AutoNation’s quarterly adjusted internet revenue from persevering with operations jumped 183.7% to $233.8 million, or $2.79 share, within the first quarter, in contrast with $82.4 million, or 91 cents per share, a yr earlier.
Income rose 26.5% to $5.90 billion. The corporate stated it had $2.1 billion of liquidity as of March 31.
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