AutoNation Inc. boosted third-quarter profits as consumers paid higher prices for vehicles while supplies were crimped by the March earthquake in Japan.
Net income from continuing operations rose 20 percent to $71 million. AutoNation said its profits set a third-quarter record on a per-share basis. Operating income jumped 19 percent to $144 million.
Total revenue at the nation's largest dealer group rose 7 percent to $3.5 billion. Unit sales of new vehicles dropped 2 percent on a same-store basis, but margins rose as scarcity drove prices higher. AutoNation said its gross profit per vehicle rose by $460, a 23 percent improvement to $2,454.
But those margin gains won't continue during the final three months of the year, CEO Mike Jackson said in a prepared statement.
"We would expect that the improving supply environment will result in sequentially lower margins on these vehicles in the fourth quarter," Jackson said.
Jackson also credited the third-quarter gains to higher finance and insurance gross profits. Gross F&I profit per vehicle rose 7 percent to $1,214.
For the period, AutoNation's domestic brand vehicle sales rose 12 percent, and premium luxury sales jumped 11 percent. Import-brand sales dropped by 10 percent.
Jackson said he remains optimistic about long-term recovery for the U.S. auto industry: "We believe that the new vehicle sales environment will continue improve in the fourth quarter."
AutoNation continues to project that U.S. industry sales will hit the mid-12 million unit mark for 2011.