February 22, 2019
(Reuters) – AutoNation Inc reported lower-than-expected quarterly profit and revenue on Friday, as the largest U.S. auto retailer sold fewer new vehicles, and the company named a new chief executive officer.
The tepid numbers and the change of guard come against the backdrop of a likely drop in sales of new vehicles in the United States this year, as higher interest rates and rising prices may prompt customers to delay their buying plans.
Auto sales in 2018 had benefited from President Donald Trump’s overhaul of the U.S. tax laws that put more money in the hands of customers.
AutoNation’s net income from continuing operations fell to $92.9 million, or $1.02 per share, for the fourth quarter ended Dec. 31, from $151.5 million, or $1.64 per share, a year earlier, when it had a $41 million benefit related to the U.S. tax reform.
Analysts on average expected the company to earn $1.14 per share, according to IBES data from Refinitiv.
Revenue fell to $5.41 billion from $5.68 billion, largely missing analysts’ estimate of $5.63 billion.
The company said new vehicle sales declined 8.3 percent to $3.07 billion, while revenue from used vehicles marginally rose to $1.21 billion.
AutoNation said Carl Liebert will succeed longtime Chief Executive Officer Mike Jackson, effective March 11.
Liebert is currently the chief operating officer at financial services company USAA.
The company’s shares fell 2.29 percent to $37.5 in trading before the bell.
(Reporting by Rama Venkat in Bengaluru; Editing by James Emmanuel and Sriraj Kalluvila)