AutoNation Beats Estimates as Mercedes Drives Demand

AutoNation Inc. (AN), the largest U.S. retailer of new cars and trucks, reported quarterly profit that topped estimates on rising demand for luxury vehicles led by the Mercedes-Benz brand.

Fourth-quarter net income increased 31 percent to $109.4 million, or 89 cents a share, from $83.2 million, or 67 cents, a year earlier, the Fort Lauderdale, Florida-based company said today in a statement. Adjusted profit per share was 83 cents, exceeding the 76-cent average estimate of 12 analysts surveyed by Bloomberg. Sales rose 8.4 percent to $4.52 billion.

Chief Executive Officer Mike Jackson praised Daimler AG’s dual introductions of the revamped flagship S-Class sedan and the new sub-$30,000 CLA coupe for drawing customers to AutoNation dealerships. Demand for those models paced Mercedes as it fended off Bayerische Motoren Werke AG’s BMW for U.S. luxury-car sales leadership in 2013 and fueled a 28 percent jump in income from its premium-luxury business.

“We have to give a call-out to Mercedes-Benz in particular with the launch of the S-Class and the CLA at the same time,” Jackson said in a telephone interview. “We had a lot of strength there both on the high end and attracting new customers to Mercedes-Benz that really gave us a particularly strong performance in this fourth quarter.”

AutoNation rose 6.1 percent to $49.89 at the close in New York. The shares gained 25 percent last year as the Standard & Poor’s 500 Index (SPX) advanced 30 percent.

To contact the reporter on this story: Craig Trudell in Southfield, Michigan at ctrudell1@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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