AutoNation quarterly profit surges on resilient demand

Feb 16 (Reuters) - AutoNation Inc reported an 88% surge in quarterly adjusted profit on Tuesday as the largest U.S. auto dealership chain earned more per vehicle thanks to tight inventories and robust demand for SUVs and trucks.

Global auto sales have rebounded from the pandemic lows hit early last year as consumers increasingly prefer buying vehicles that provide more safety than public transportation during the health crisis.

Fort Lauderdale-based AutoNation’s gross profit per new vehicle jumped 50% to $2,775 in the fourth quarter ended Dec. 31, while it rose 9.6% to $1,567 for used vehicles.

The company set a long-term goal of increasing combined new and used unit sales to more than 1 million vehicles annually, more than double the units sold in 2020.

AutoNation also said it expects to open five new stores by the end of this year and 10 additional stores in 2022.

The company’s quarterly adjusted net income from continuing operations was $213.1 million, or $2.43 share, compared with $113.2 million, or $1.25 per share, a year earlier.

Revenue rose 4% to $5.79 billion, and the company said it had $2.3 billion of liquidity as of Dec. 31, 2020.

Reporting by Shreyasee Raj in Bengaluru and Joe White in Detroit; Editing by Aditya Soni