FORT LAUDERDALE, Fla. (AP) — AutoNation reported a 14 percent decline in first-quarter earnings after a Texas hail storm caused $3.6 million in damages to vehicles and the company was forced to offer steep discounts to get buyers on the car lot.
CEO Mike Jackson told CNBC that without the steep discounts, sales would have been flat for the quarter, but it didn’t seem to bother investors who pushed the stock up 3 percent in afternoon trading.
The company reported first-quarter earnings of $95.9 million — which beat Wall Street expectations after accounting for the hail damage and the shifting of a stock option expense — but were significantly short of the $111.5 million for the same period last year. AutoNation has over 20 dealerships in North Texas.
On a per-share basis, the Fort Lauderdale, Florida-based company said it had profit of 90 cents, with adjusted earnings of 96 cents. For the same period last year, the company earned 97 cents per share.
The results exceeded Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of 93 cents per share.
The auto retailer posted revenue of $5.12 billion in the period, which fell short of Street forecasts. Six analysts surveyed by Zacks expected $5.24 billion.
AutoNation shares are down 17 percent since the beginning of the year and 25 percent in the last 12 months.