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What: Shares of auto retailer AutoNation
So what: During earnings season, it's all about expectations. Beat expectations and you're a hero; miss them and you'll be buried in a sell-off. So it should be no surprise to hear that AutoNation's fourth-quarter earnings solidly beat Wall Street's expectations. On a continuing-operations basis, earnings per share climbed 55% year over year, from $0.29 to $0.45. Analysts were looking for just $0.36. Revenue of $3.2 billion also topped the average estimate of $3.1 billion.
Now what: While the company didn't provide specific guidance for 2011, it did express optimism about the state of the industry -- particularly when it comes to the domestic auto manufacturers. That optimism shouldn't be too shocking, since sales of domestic brands -- which include Ford
After a torrid performance in 2010, in which shares climbed nearly 50%, AutoNation's stock trades at more than 17 times estimated 2011 profit per share. While that's not crazy-expensive, investors eyeing the stock right now may want to wait for a better price.
Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.The Fool’s disclosure policy prefers dividends over a sharp stick in the eye.