(AN) AutoNation Sales Dip on Supply Crunch

AutoNation Inc. (AN) reported a 15% fall in new vehicle sales to 16,347 vehicles in May due to shortages in supply of vehicles, especially from Japan that accounts for 52% of its sales. The Japanese automotive industry has been hit hard by the earthquake and tsunami on March 11 that damaged many parts supplying companies’ plants, leading to a parts shortage.

Sales of the Domestic brands, which comprise of stores that sell vehicles manufactured by General Motors (GM), Ford Motor Co. (F) and Chrysler LLC, inched up 3% to 5,995 units.

Sales of the Import brands, comprising stores that sell vehicles manufactured primarily by Toyota Motor Corp. (TM), Honda Motor Co. (HMC) and Nissan Motor Co. (NSANY), slashed 30% to 7,110 units. The twin disaster in Japan led many automakers to suspend or cut back production at their plants on the back of parts shortages, leading to dearth of vehicles supplied by them.

Meanwhile, sales of the Premium Luxurybrands, comprising stores that sell vehicles including Daimler AG’s (DDAIF) Mercedes Benz, BMW and Toyota Lexus, increased 1% to 3,242 units.

AutoNation’s sales decrease was more pronounced than the overall sales decline in the U.S. during the month under study. Last month, auto sales in the U.S. dipped 3.7% on a year-over-year basis to 1.06 million vehicles. It has touched the lowest rate in 8 months since 11.76 million vehicles recorded in September 2010.

AutoNation, a Zacks #3 Rank (Hold) stock, posted a profit of $70.3 million or 46 cents per share in the first quarter of 2011, compared with $58.8 million or 34 cents in the year-ago period. With this, the company exceeded the Zacks Consensus Estimate of 43 cents per share.

Total revenues amounted to $3.31 billion, up 16.5% from $2.84 billion last year led by massive rise in new and used retail vehicle sales. Reported revenues also surpassed the Zacks Consensus Estimate of $3.23 billion. Operating income improved to $140.0 million from $115.1 million a year ago.

New vehicles added $1.79 billion to total revenues, up 22.6% from last year’s $1.46 billion. The retailer’s new vehicle sales rose 22.8% to 55,710 units, transforming into revenues of $32,043 per vehicle, a marginal decrease from last year’s $32,209. However, the company expects new vehicle sales of 12 million units for full year 2011, given the supply constraints from Japan.

AUTONATION INC (AN): Free Stock Analysis Report

DAIMLER AG (DDAIF): Free Stock Analysis Report

FORD MOTOR CO (F): Free Stock Analysis Report

GENERAL MOTORS (GM): Free Stock Analysis Report

HONDA MOTOR (HMC): Free Stock Analysis Report

NISSAN ADR (NSANY): Free Stock Analysis Report

TOYOTA MOTOR CP (TM): Free Stock Analysis Report

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