(Adds CEO comments)
DETROIT, April 25 AutoNation Inc, the
largest U.S. auto retail chain, on Tuesday reported a higher
quarterly net profit that beat expectations and said it expects
sales and gross profit from used vehicle operations to rise in
the second quarter.
New-car sales during the first quarter at the Fort
Lauderdale, Florida-based company dropped more than 4 percent to
75,798 vehicles, while used-car sales rose more than 4 percent
to 60,608 vehicles.
Revenue per vehicle for new cars rose 4 percent to $36,890,
but slid 1 percent to $19,075 for used vehicles.
AutoNation Chief Executive Officer Mike Jackson told Reuters
on Tuesday that the prices the company pays for used cars are
falling as supplies of used cars rise and automakers offer
deeper discounts on new vehicles.
"The manufacturers have made the decision to push for
volume," Jackson said. The decline in used vehicle prices offers
an opportunity for AutoNation to increase the profitability of
its used vehicle sales in the second quarter, Jackson said. The
company during the first quarter cleared out stocks of vehicles
that had been held back because of unrepaired recalls.
The new and used vehicle markets combined should total more
than 55 million vehicles this year, Jackson said, calling that
a healthy overall level for AutoNation even if new vehicle sales
AutoNation reported a first-quarter net profit of $98.1
million, or 97 cents per share, up 2.3 percent from $95.9
million, or 89 cents, a year earlier. Analysts, on average,
expected EPS of 91 cents.
Revenue totaled $5.14 billion, up from $5.12 billion.
Analysts expected $5.32 billion.
AutoNation reported a lower gross profit for vehicle sales
in the quarter, but an increase for its parts and service
(Reporting by Nick Carey; Editing by Jeffrey Benkoe and