AutoNation (AN, Financial) released its first-quarter results on May 11 before the market opened. The automotive retailer surpassed quarterly earnings and revenue projections.
The Fort Lauderdale, Florida-based company recorded earnings of $0.91 per share, down from $1.04 in the year-ago period. Analysts had forecasted earnings of $0.70 per share. Revenue declined 6% to $4.67 billion, which was also above analysts’ projections.
Segment performance
The company’s Domestic segment, which sells cars produced by General Motors (GM, Financial), Ford (F, Financial) and Chrysler (FCAU, Financial), posted income of $54 million in the first quarter, which reflected a decline of 4% on a year-over-year basis.
The Import division, which sells cars manufactured by Toyota (TM, Financial), Nissan (NSANY, Financial) and Honda (HMC, Financial), saw income down 9% year-over-year to $66 million.
In the Premium Luxury segment, income of $80 million plummeted 5%. This segment sells cars manufactured by Mercedes-Benz, BMW (BMW, Financial), Lexus and Audi (NSU, Financial).
Liquidity and cost-saving measures
The auto retailer has liquidity of $1.4 billion as of May 8. This included cash on hand of $750 million and $650 million borrowed under a revolving credit facility.
As part of its cost-saving measures, the company is holding back on increasing annual salaries for the senior officers and associates. In addition, the company is giving its employees unpaid leave. The company is also reducing its capital spending program for 2020.
Some positives
In the beginning of April, states that represent roughly 95% of the company's total revenue were under lockdown and stay-at-home orders. As of May 8, only 51% of the company’s total revenue sources are under shelter-in-place orders.
New and Used retail sales tumbled 52% in the first 10 days in April. The same metric was down only 19% in the last 10 days of the month.
Disclosure: I do not hold any positions in the stocks mentioned.
Read more here:
- Boise Cascade Posts Mixed 1st-Quarter Results
- Kontoor Brands Beats 1st-Quarter Earnings Projections, but Posts Revenue Miss
- What Investors Need to Know About General Motors' 1st-Quarter Results
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
