AutoNation Announces Share Buyback - Analyst Blog
March 27 2012 - 9:00AM
Zacks
AutoNation Inc. (AN) announced that its board
of directors has authorized the repurchase of up to an additional
$250 million of common stock. The company revealed that it has
exhausted its previous stock buyback program.
Last year, the automotive retailer has repurchased 18.6 million
shares for $635.2 million. This compared with repurchases of 26.6
million shares for $523.7 million in 2010.
In January, the company had announced that its board of
directors authorized the repurchase of up to an additional $250
million of its common stock. With the increased authorization, the
company had approximately $278 million worth of shares remaining
under the Board-approved share repurchase authorization as of
January 25, 2012. As of March 23, 2012, the company has about 124.6
million shares outstanding.
AutoNation is the largest automotive retailer in the U.S. and is
about twice the size of its nearest competitor. It sells 33
different brands of new vehicles, the core brands being
Ford (F), General Motors (GM),
Chrysler, Toyota (TM), Nissan
(NSANY), Honda (HMC) and BMW. These core brands
represent more than 90% of the company sales.
AutoNation’s effort to expand its dealer network by investing in
existing stores and service centers will help it to outgrow peers.
The company believes new vehicle sales will continue to improve
with the long-term recovery in the U.S. market. As of December 31,
2011, the company owned and operated 258 new vehicle franchises
that sell 32 brands located in major metropolitan markets in 15
states.
In the fourth quarter of 2011, the company saw a profit of $71
million or 51 cents per share compared with $68 million or 45 cents
per share in the same quarter of 2010 (excluding debt refinancing
costs of $1 million or 1 cent per share, after-tax), reflecting an
increase of 13% on a per-share basis. With this, the company has
beaten the Zacks Consensus Estimate of 48 cents per share.
Revenue went up 13% to $3.7 billion from $3.2 billion in the
year-ago period, driven by stronger retail new and used vehicle
sales. It was higher than the Zacks Consensus Estimate of $3.5
billion.
Gross profit per new vehicle retailed increased 2% to $2,451,
despite the decrease in additional incentives compared to the
year-ago period. However, gross profit per used vehicle retailed
fell 5% to $1,485. Finance and insurance gross profit per vehicle
retailed increased 5% to $1,223.
Due to the improved results and strong fundamentals, AutoNation
retains a Zacks #2 Rank on its stock, which translates to a
short-term (1 to 3 months) rating of “Buy”.
AUTONATION INC (AN): Free Stock Analysis Report
FORD MOTOR CO (F): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis Report
HONDA MOTOR (HMC): Free Stock Analysis Report
NISSAN ADR (NSANY): Free Stock Analysis Report
TOYOTA MOTOR CP (TM): Free Stock Analysis Report
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