July 23 (Reuters) - U.S. auto dealer chain AutoNation Inc on Thursday reported a nearly three-fold rise in quarterly profit due to lower expenses and a one-time gain on its investment in online used-car retailer Vroom.
Auto dealers have been hard hit by the COVID-19 pandemic, with some states temporarily barring new vehicle sales. Their sales have plummeted due to stay-at-home orders aimed at curbing the spread of the highly contagious virus, leaving them with no choice but to aggressively cut costs.
Following a sales slump in the last two weeks of March, AutoNation placed about 7,000 employees on unpaid leave, initiated temporary pay cuts for staff and curtailed advertising expenses.
That helped the company report a nearly 14% fall in expenses in the quarter and partially boost its net income from continuing operations, which rose to $279.9 million, or $3.18 per share, in the second quarter ended June 30, from $101.0 million, or $1.12 per share, a year earlier.
Excluding the $1.82 per share gain, it earned $1.41 per share.
Overall, revenue fell 15.2% to $4.5 billion as new vehicle sales were down 22.7% at 54,513 vehicles during the second quarter. Used vehicle volumes declined 5.5% to 58,920 units.
The Fort Lauderdale-based company's gross profit per used vehicle jumped 23.7% to $1,796 during the quarter.
AutoNation has been investing in expanding its used-car business and branded car parts and services where margins are higher than new-car sales. (Reporting by Rachit Vats in Bengaluru and Joe White in Detroit; Editing by Amy Caren Daniel)