Investors in AutoNation, Inc. (NYSE:AN), America's largest automotive retailer, are enjoying a nice jump in share price Thursday, closing up almost 15%. This came after the company released its third-quarter results and announced a multiyear service agreement with Waymo, Alphabet Inc.'s (NASDAQ:GOOGL) (NASDAQ:GOOG) self-driving technology company.
Starting with AutoNation's third-quarter results, the company posted a slightly disappointing $5.43 billion that fell short of analysts' estimates calling for $5.57 billion. But despite the top line falling a bit short of estimates, AutoNation impressed on the bottom line: Its adjusted earnings per share came in at $1.08, well ahead of analysts' estimates of $0.84 per share.
The story that took over headlines, however, was AutoNation's deal with Waymo. Said Mike Jackson, chairman, CEO and president of AutoNation: "We are excited to partner with Waymo, [which] is a leader of self-driving technology. AutoNation remains uniquely positioned to lead our industry toward the future of mobility, due to our brand, exceptional service and maintenance capabilities, and commitment to innovation. AutoNation and Waymo are like minded in our joint mission to keep people safe whenever they are in a vehicle."
Per the terms of the agreement, AutoNation will provide long-term vehicle maintenance and repairs for Waymo's self-driving fleet, and will expand as Waymo adds additional brands. Remember that one of AutoNation's advantages is its repair and service bays, which enable the company to offer complex repairs necessary for the increasing complexity of self-driving technology. As the world shifts toward electrified vehicles, driverless technology, and the ride-hailing fleets of services like Uber and Lyft, these partnerships will be critical to adapt and thrive in a rapidly changing industry -- so it's not surprising AutoNation's stock jumped today.