AutoNation (NYSE:AN), the top U.S. vehicle retailer, said it expects strong demand for new vehicles to continue into next year, as low-interest rates and consumer demand helped drive a three-fold jump in its quarterly profits.
AutoNation reported net income from continuing operations of $384.9 million U.S., or $4.83 U.S. a share, for the second quarter ended June 30, compared with $123.9 million U.S., or $1.41 U.S. per share, a year earlier.
The global semiconductor shortage has depleted vehicle inventories and forced automakers to cut production, prompting consumers to pay more for cars as the COVID-19 pandemic drives demand for private vehicles.
Fort Lauderdale, Florida-based AutoNation’s gross profit per new vehicle jumped 89% to $4,157 in the second quarter, while the gross profit per used vehicle rose 24% to $2,240, the company said in announcing its latest earnings.
Sales of new and used vehicles jumped 42% and 37% respectively in the second quarter, helped in part by lower borrowing costs. AutoNation’s revenue rose 54% to $6.98 billion U.S. in the quarter ended June 30.