Today Mike Jackson Chairman and CEO of AutoNation reported an all time record quarterly adjusted EPS from continuing operations of $0.66 for the company; for the second quarter, a 35% increase as compared to $0.49 for the same period in the prior year. During the second quarter, we continued to see a strong improvement in auto industry sales, as consumers enjoyed a broader array of choices than ever before, as well as a strong credit environment.
Second quarter 2012 revenue totaled $3.9 billion, compared to $3.3 billion in the year-ago period, an increase of 17%, driven primarily by stronger retail new vehicle unit sales. In the second quarter, total U.S. industry new vehicle retail sales increased 15% based on CNW Research data. In comparison, during the same period, AutoNation’s new vehicle unit sales increased 29%.
The second quarter industry SAAR of 14.1 million units was a 16% improvement over prior year. As we look at the rest of 2012, we believe that the improvement in new vehicle sales will continue, and have a planning assumption for 2012 industry new vehicle sales in the mid 14 million units and the company believes that accelerated product launches, replacement demand, and robust consumer credit will continue to support a strong sales environment.
AutoNation's improved operating leverage in the second quarter also reflects a disciplined focus on expense management as well as its long-term investments in centralized processes. The company has effectively leveraged our scale to drive cost savings and deliver improved shareholder returns.
AutoNation will continue to focus on investments in technology and best practices which revolve around the customer experience leading to efficiencies in our operations, and these investments in the “customer experience” have continued to improve the productivity of the company’s associates. In the second quarter we saw revenue growth of 17% with a headcount increase of just over 2%.
In the second quarter Import inventories returned to normal and there was growth of 44% of Import unit sales over the same period last year when both Toyota and Honda were dealing with a limited supply of parts for production due to the devastating tsunami that hit the country.
The recovery that the U.S. is seeing now is driven by “replacement demand”, as the age of the fleet on the road has now increased to 11 years old. Also, manufacturers have stepped up the launch pace of new models and, the credit environment is very strong – with low interest rates and ample credit available and AutoNation is well-positioned to capitalize on the recovery, with an optimal brand and market mix and a disciplined cost structure. We continue to demonstrate our ability to drive strong shareholder returns during the multi-year recovery in auto retail.
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Posted by: Erik Crofton | 09/05/2012 at 11:48 PM