Nov. 6 (Bloomberg) -- AutoNation Inc., the largest publicly traded U.S. auto retailer, posted a quarterly net loss of $1.41 billion, its first since 1999, as it wrote down the value of dealerships because of dwindling sales.

The third-quarter loss was $7.99 a share. Excluding a non- cash goodwill writedown of $1.46 billion, profit from continuing operations was $44 million, or 25 cents a share, the Fort Lauderdale, Florida-based company said in a statement. Results on that basis trailed analysts' estimates.

AutoNation follows Group 1 Automotive Inc. and Sonic Automotive Inc. in reporting losses, while Penske Automotive Group Inc.'s profit fell 44 percent as high fuel prices and reduced access to loans shrank the U.S. auto market. AutoNation's sales plunged 21 percent to $3.54 billion.

The drop in volume ``was worse than expected,'' said Rex Henderson, an analyst at Raymond James & Associates in St. Petersburg, Florida. ``The magnitude of the impairment, the size, is a little bit of a surprise.'' He recommends buying the shares.

Analysts expected an adjusted third-quarter profit of 29 cents a share, the average of 10 estimates compiled by Bloomberg. Net income a year earlier was $72.1 million, or 37 cents.

Expense Review

AutoNation is studying jobs and spending on marketing and inventory for additional cuts, Chief Operating Officer Mike Maroone said in an interview. He said AutoNation has eliminated about 2,000 jobs this year and expects to meet its goal for $100 million in annual savings. The company had 25,000 employees at the end of 2007, according to data compiled by Bloomberg.

AutoNation fell 32 cents, or 5.3 percent, to $5.77 at 4 p.m. in New York Stock Exchange composite trading. The shares have plummeted 63 percent this year.

``The third quarter was negatively impacted by the credit crisis that escalated in September into a full-blown credit panic,'' Chief Executive Officer Mike Jackson said in the statement. That ``accelerated the decline in the U.S. economy and auto retail market.''

U.S. industrywide sales for 2008 will be ``in the low 13 million-unit level, an 18-year low,'' Jackson said. Should 2009 sales match the ``most conservative industry forecast'' of 12 million vehicles, AutoNation will remain profitable and in compliance with its debt covenants, he said.

`Cyclical Decline'

The U.S. market is ``at the deep end of a cyclical decline'' and is starting to bottom out, Jackson said in an interview. ``We expect credit to gradually thaw and improve,'' helping buoy consumer confidence and demand.

Annual industrywide sales averaged 16.8 million this decade through 2007. They tumbled 18 percent in the third quarter.

AutoNation's biggest sales declines occurred at its dealerships for General Motors Corp., Ford Motor Co. and Chrysler LLC vehicles, where revenue fell 30 percent.

Sales slid 17 percent in the so-called import segment, for vehicles built chiefly by Toyota Motor Corp., Honda Motor Co. and Nissan Motor Corp. Revenue dropped 15 percent for ``premium/luxury'' dealers, which primarily sell autos from Toyota's Lexus, Bayerische Motoren Werke AG and Daimler AG's Mercedes-Benz, AutoNation said.

``Our inventory is still a little bit heavily weighted'' to U.S. brands, Maroone said. Revenue from those brands was $1.2 billion, or 34 percent of AutoNation's total, compared with $1.41 billion, or 40 percent, from the import segment.

To contact the reporter on this story: Alex Lange in Southfield, Michigan, at alange4@bloomberg.net

Last Updated: November 6, 2008 16:15 EST