By Marcia Heroux Pounds
FORT LAUDERDALE | AutoNation was riding high throughout Thursday, as its stock soared by $7.05 or 14.8 percent to $54.65 a share.
Investors liked two announcements: a deal with Google-parent Alphabet’s self-driving technology company, and the auto retailer’s third-quarter earnings of $1 a share, which beat analysts’ estimate of 84 cents.
“[Waymo] has a vision of a shared vehicle that is operating autonomously, but at the highest level of safety. I believe Waymo is the leader in this ambition to have a shared autonomous vehicle in the marketplace,” said AutoNation CEO Mike Jackson on a conference call with Wall Street analysts on Thursday.
Jackson said the agreement gets AutoNation in on the ground floor of shared autonomous vehicles.
“I look at this and say I want to be part of it, and I want AutoNation to be part of it. When I look at the future of mobility, it will revolve around sharing. We think we can play a vital role in that,” he told analysts, whose seemed intrigued by the deal.
The nation’s largest retailer’s multi-year agreement will support Waymo’s autonomous vehicle program to maximize the life of Waymo’s vehicles across the nation. AutoNation stores will provide long-term vehicle maintenance and repairs for Waymo’s self-driving Chrysler Pacifica hybrid vehicle fleet, and will expand with Waymo as they add brands.
Waymo CEO John Krafcik said AutoNation “will help assure that Waymo vehicles are always in top condition as we bring fully self-driving cars to the public.”
Jackson said experiencing two major hurricanes in two markets was “unprecedented,” but that even with all that disruption, same-store sales were up.” Hurricane Harvey swept through Houston in late August and Hurricane Irma through all of Florida in September.
AutoNation said Hurricane Irma negatively impacted third-quarter earnings by about $8 million, or 8 cents a share, which also was less than expected. Stores were closed for some days both before and after the storm.
But despite flooding and other damage in Texas from Hurricane Harvey, new vehicle sales rebounded quickly from that storm, AutoNation executives said on the conference call.
AutoNation reported third-quarter net income from continuing operations of $98 million, or $1 a share, compared with $107 million, or $1.05 a share, in the same quarter in 2016. Quarterly revenue was $5.4 billion compared with $5.6 billion a year ago.
Retail vehicle unit sales were up 1 percent, or up 2 percent on a same store basis, compared to the year-ago period, the company said.
Same store used vehicle gross profit was up 9 percent compared to the same period a year ago, AutoNation said.
AutoNation has had an eventful year that has included its stores affected by two hurricanes, Harvey in Texas and Irma in Florida; resignation of president William Berman, and rollout of a new strategy focused on used car sales.