AutoNation revenue misses as new vehicle sales skid on tight supplies

[July 21, 2022]  (Reuters) - Top U.S. auto retailer AutoNation Inc on Thursday missed Wall Street estimates for second-quarter revenue, hit by a steep decline in new vehicle sales as strained global supply chains made it harder to replenish depleted inventories.

People look at vehicles for sale on the lot at AutoNation dealership in Cerritos, California December 9, 2015. REUTERS/Mario Anzuoni/File Photo

Revenue from new vehicle sales tumbled 14% from a year earlier, the company said, while warning of continued tight inventory.

Carmakers' production lines remain under pressure from a global semiconductor chip shortage that has crimped their ability to cater to strong demand.

Meanwhile, used vehicle revenue for Auto Nation increased 13% from a year earlier. The company on Thursday also announced it would acquire California-based CIG Financial as it looks to bolster the used-vehicle business.

AutoNation said new vehicle gross profit per unit jumped 47% in the quarter.

Peer Lithia & Driveway on Wednesday also missed on revenue estimates for the second quarter and reported a 16.9% fall in same-store new vehicle revenue.

Auto Nation said net income fell to $376.3 million from $384.8 million a year earlier. On a per share basis, earnings rose to $6.48 from $4.83. The company said it had repurchased 3.7 million shares for about $404 million during the quarter.

Revenue dipped 1.6% to $6.87 billion, below analysts' average estimate of $7 billion, according to Refinitiv data.

(Reporting by Kannaki Deka in Bengaluru; Editing by Sriraj Kalluvila)

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