AutoNation (AN) Misses Q3 EPS by 10c; Announces Acquisitions; Approves Additional $250M Stock Buyback

AutoNation (NYSE: AN) reported Q3 EPS of $1.05, $0.10 worse than the analyst estimate of $1.15. Revenue for the quarter came in at $5.57 billion versus the consensus estimate of $5.61 billion.

AutoNation today announced that its Board of Directors has authorized the repurchase of up to an additional $250 million of AutoNation's common stock. AutoNation has approximately $316 million total Board authorization remaining for share repurchases with the increased authorization and approximately 101 million shares outstanding as of October 26, 2016. During the third quarter of 2016, AutoNation repurchased one million shares of common stock for an aggregate purchase price of $50 million.

AutoNation today announced the acquisition of three Premium Luxury franchises and one collision center and the award of three Premium Luxury franchise add-points, with combined anticipated annual revenues of approximately $430 million, once the add-points are fully operational. With the addition of the six Premium Luxury franchises, AutoNation will own and operate a total of 96 Premium Luxury franchises from coast to coast.

Segment results(2) for the third quarter and first nine months of 2016 were as follows:

Third Quarter 2016 Segment Results

• Domestic - Domestic segment income(3) was $84 million compared to year-ago segment income of $95 million, a decrease of 11%.
• Import - Import segment income(3) was $79 million compared to year-ago segment income of $86 million, a decrease of 7%.
• Premium Luxury - Premium Luxury segment income(3) was $81 million compared to year-ago segment income of $85 million, a decrease of 5%.

Acquisitions

• BMW of Vista – located in San Diego, California
  • 2nd BMW store in the San Diego market; 15th BMW store nationwide
  • Acquired October 2016
  • Represents annual revenue of approximately $60 million and 1,200 retail new and used vehicle unit sales
• Jaguar Bethesda and Land Rover Bethesda – located in Bethesda, Maryland
  • 10th store in the Baltimore/D.C. market; 8th Jaguar/Land Rover store nationwide
  • Largest Jaguar Land Rover showroom in the United States
  • Expected to close in the fourth quarter of 2016
  • Represents annual revenue of approximately $80 million and 1,000 retail new and used vehicle unit sales
  • Acquisition subject to customary terms and conditions, including manufacturer approval
• Westmont Body Werks – located in Westmont, Illinois, a suburb of Chicago
  • 70th AutoNation collision center nationwide
  • Acquired October 2016
  • Represents annual revenue of approximately $10 million

Add-Points

• BMW of Delray Beach – located in Palm Beach County, Florida
  • 1st BMW franchise in South Florida; 25th Premium Luxury franchise in Florida
  • Expected to open second half of 2018
  • Anticipated annual revenue of approximately $180 million, once fully operational
• Jaguar West Houston and Land Rover West Houston – located in Houston, Texas
  • 1st Jaguar Land Rover store in Texas; 10th Premium Luxury store in Texas
  • Expected to open second quarter of 2018
  • Anticipated annual revenue of approximately $100 million, once fully operational

For earnings history and earnings-related data on AutoNation (AN) click here.

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