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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.
AutoNation Chief Executive Mike Jackson said on Tuesday the shortage in supplies of semiconductors “is significant, and manufacturers can’t give us too much visibility” on how vehicle shipments will be affected. For now, Jackson said, “retailers are managing the situation through price.”
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.
Jackson said he’s optimistic about U.S. car and truck demand given the combination of low interest rates, stable fuel prices and the prospect of a significant new federal stimulus package.
“You can’t ask for a better environment,” he said.
Fort Lauderdale, Florida-based AutoNation’s gross profit per new vehicle jumped 50% to $2,775 in the fourth quarter, 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 number 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.
“We will do acquisitions in new vehicle franchises,” Jackson said.
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 Kirsten Donovan and Steve Orlofsky