AutoNation earnings up 26% as sales rise

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AutoNation Inc., the nation’s largest auto dealership chain, said today its first-quarter profit rose 26 percent as sales of new and used vehicles remained strong through the quarter.

The Fort Lauderdale, Fla., company cut its full-year forecast for U.S. new vehicle sales industrywide, however, because of parts shortages caused by the Japanese earthquake. AutoNation said it could manage through the problems.

AutoNation reported net income of $69.4 million, or 46 cents per share, in the first three months of 2011, up from $55.2 million, or 32 cents per share, a year earlier. Revenue increased almost 17 percent to $3.31 billion from $2.84 billion.

The earnings beat Wall Street estimates of 43 cents per share, according to FactSet. Analysts expected revenue of $3.32 billion.

The company, which has 243 franchises in 15 states, reported new vehicle sales rose 20 percent for the quarter, while sales of used vehicles were up 13 percent.

CEO Mike Jackson said in a statement that the underlying recovery in consumer demand for cars and trucks remains on track for the year, but Japan-based automakers will have trouble supplying vehicles for the rest of 2011 because of parts factories that were damaged by the March 11 earthquake and tsunami.

The company cut its full-year new-vehicle sales forecast for the U.S. to around 12.5 million from 12.8 million because of manufacturer production cuts due to the earthquake.

“Based on current information, we see significant reductions in vehicle shipments from Japanese manufacturers through year-end, with the resumption of normal shipment levels in early 2012,” Jackson said in a statement.

The dealership chain, he said, will adapt to the changes because of its diversified business model. “We are confident we can manage through the challenges presented by Japanese product constraints. We continue to be optimistic about the long-term recovery for the U.S. auto market.”