February 1, 2018 / 1:09 PM / 3 months ago

UPDATE 1-AutoNation profit gets a lift from tax overhaul, used cars

(Adds details of results, background)

DETROIT, Feb 1 (Reuters) - AutoNation Inc, the largest U.S. auto retail chain, reported a better-than-expected fourth-quarter profit on Thursday, boosted by rising profits from used vehicles, benefits from December’s U.S. tax overhaul and business divestitures.

The average gross profit per used vehicle sold by AutoNation in the quarter rose 6 percent to $1,344. But gross profit per new vehicle sold fell nearly 6 percent to $1,847.

The Fort Lauderdale, Florida-based company’s revenue per vehicle rose for new and used vehicles alike.

U.S. auto industry sales of new vehicles declined 2 percent last year, with major automakers increasingly reliant on heavy discounts to consumers. The industry is expected to decline further in 2018 as interest rates rise and more late-model used cars come back to dealer lots to compete with new ones.

AutoNation reported a fourth-quarter net profit of $151.3 million or $1.64 per share, up from $115.3 million or $1.14 per share a year earlier. Excluding a 45 per cent share benefit from the tax overhaul and 17 cents per share from business divestitures, the company earned $1.02 per share.

Analysts had expected earnings per share excluding items of 93 cents per share.

The company reported revenue for the quarter of $5.7 billion, up from $5.5 billion a year earlier. Analysts had on average expected revenue of $5.55 billion. (Reporting By Nick Carey; Editing by Chizu Nomiyama and Frances Kerry)

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