AutoNation saw profits spike 18 percent last year, as car sales continued to grow.
Sales of new vehicles grew by $1 billion to nearly $10 billion for 2013, with the Fort Lauderdale-based company posting overall sales of $17.5 billion last year, according to a year-end earnings report issued Friday morning. That was AutoNation’s best performance since the 2007-09 recession, but still below its 2006 total of $18.9 billion in total sales.
AutoNation, which owns the former Maroone dealerships in South Florida, saw its stock price drop about 1 percent during Friday morning’s bear market to $49.39 a share. Profits for the year hit $375 million, or $3.04 a share.
CEO Mike Jackson predicted the U.S. auto industry will hit 16 million in new-vehicle sales in 2014, after falling just short of that pace in 2013.
“We believe that replacement demand, attractive products and strong consumer credit will continue to support sales – as we return to the normal selling rate of 16 million units,’’ Jackson said in prepared remarks for analysts.
Last year the company folded its regional dealership brands, including Maroone, into the AutoNation brand.
Friday’s earnings report also offers a lesson in the economics of selling cars. For every dollar AutoNation earns selling a vehicle, it keeps about 7 cents in profit, according to the 2013 results. For every dollar AutoNation earns servicing a car, it keeps 43 cents.
The service department’s $2.5 billion in revenue generated 40 percent of AutoNation’s 2013 gross profits, compared to 35 percent of the profits from the company’s $14 billion in new and used vehicle sales.