FORT LAUDERDALE, Fla. (AP) -- AutoNation, the country's largest car dealership chain, took advantage of growing U.S. car and truck sales to post a 31% increase in fourth-quarter net earnings, sending its shares higher.
CEO Mike Jackson said in an interview Thursday that he expects the strong performance to continue this year even though U.S. auto sales growth is expected to slow.
Low interest rates, widely available financing, strong replacement demand and exciting new vehicles from many manufacturers helped push U.S. sales up almost 8% to 15.6 million vehicles last year. "I see none of that changing" in 2014, Jackson said.
Most analysts expect 2014 sales to exceed 16 million, but growth will slow to 3% or 4%. "Anytime you're selling over 16 million, you've got to call it a good year," Jackson said.
But he said the slowing growth rate will be a test for the industry, which has maintained strong prices for its vehicles as the economy has recovered. Sales have grown by around 1 million vehicles per year for the past four years, Jackson said. "The industry has to adjust to a slower growth rate," he said. "How they adjust and whether it triggers a price war remains to be seen. I'm hopeful the discipline holds up."
The Fort Lauderdale, Fla., company earned $109.4 million, or $0.89 per share, for the three months ended Dec. 31 compared with $83.2 million, or $0.67 per share, a year earlier. Revenue rose more than 8% to $4.52 billion.
The company earned $0.83 per share from continuing operations, and that matched expectations of analysts polled by FactSet. Analysts expected $4.59 billion in revenue.
The strong earnings came as the company passed the one-year anniversary of changing all of its 269 dealership franchises to the AutoNation name, Jackson said.
AutoNation's performance was driven by growth in all of its business sectors -- new vehicles, used vehicles, service and finance and insurance, the company said in a statement. Strong luxury sales fueled the net income increase for the quarter. Jackson said 46% of AutoNation's profits came from premium German luxury brands like BMW, Audi and Mercedes.
For the full year, AutoNation made $374.9 million, or $3.04 per share. That's up more than 18%. Revenue rose 12% to $17.52 billion.
