Feb 11 (Reuters) - AutoNation Inc on Tuesday reported a 70% rise in quarterly profit, as higher demand for used vehicles helped the largest U.S. auto dealership chain offset a decline in new-vehicle sales.
The quarter also included a gain of 43 cents per share related to property divestitures and a non-cash benefit related to an investment.
The company’s profits have been hurt as new-vehicle sales weakened after a long bull run since the end of the 2007 to 2009 economic crisis.
AutoNation has been investing in expanding its used-car business and branded car parts and services, such as collision repair centers, to boost future profitability.
AutoNation’s used-car and parts and services businesses, which carry higher margins than new-car sales, could help the company lessen its dependence on automakers that dictate strict terms to retailers.
New-vehicle sales were down 5.1% at 74,383 units during the fourth quarter ended Dec. 31, while used-vehicle volumes grew 7.3% to 59,022 units.
The company said its net income from continuing operations rose to $157.7 million, or $1.74 per share, in the quarter, from $92.9 million, or $1.02 per share, a year earlier.
Revenue rose 2.5% to $5.55 billion.
Analysts on average had expected earnings of $1.14 per share on revenue of $5.53 billion, according to IBES data from Refinitiv. (Reporting by Ankit Ajmera in Bengaluru and Joe White in Detroit; Editing by Maju Samuel)
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