AutoNation shares hit new all-time high after company reports record quarterly earnings

AutoNation shares hit a new all-time high on Thursday at over $ 130 a share after the nation’s largest new car seller posted a sixth straight quarterly profit.

AutoNation surpassed Wall Street’s earnings and sales forecasts on sustained consumer demand outstripping car shipments due to continued worldwide semiconductor chip shortages, resulting in record car prices and profit margins.

Florida dealer group shares jumped 12% on Thursday morning before falling to about $ 124 a share, up 6%. AutoNation shares are up nearly 70% this year.

According to Refinitiv, the company reported adjusted earnings per share of $ 5.12 per share in the third quarter, an all-time record. AutoNation’s revenue for the quarter jumped 18% to $ 6.38 billion from an estimate of $ 6.31 billion.

AutoNation reported a net profit of $ 361.7 million, nearly double the $ 182.6 million it earned a year earlier.

“We are pre-selling what we plan to produce,” AutoNation CEO Mike Jackson told CNBC’s Squawk Box on Thursday. “They come and go … there is demand.”

In addition to record profits, AutoNation also announced the acquisition, which is expected to generate approximately $ 420 million in annual revenue. The company’s board also approved a buyback of up to $ 1 billion in AutoNation common stock.

AutoNation previously said it was buying back 7.9 million common shares, or 11% of the outstanding shares, for an aggregate purchase price of $ 879 million in the third quarter.

AutoNation’s profit was driven by a 53% increase in used car sales year-over-year, while new car sales were largely unchanged.

The company said new gross margins for a new car in the same store were at a record $ 5,484, up $ 2,949. According to the company, the gross profit per used car was $ 2,104, up $ 108 from a year earlier and 51% over the third quarter of 2019.