AutoNation announces deal with Alphabet’s self-driving technology company

AutoNation announces deal with Alphabet’s self-driving technology company

AutoNation was riding high Thursday morning, with its stock up $6.06 or 12.73 percent to $53.66 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.

The Fort Lauderdale-based auto retailer said that September’s Hurricane Irma negatively impacted third-quarter earnings by about $8 million, or 8 cents a share, which also was less than expected.

The nation’s largest retailer said it has a multi-year agreement to support Waymo’s autonomous vehicle program. AutoNation said it will offer strategic capabilities to maximize the life of Waymo’s vehicles across the United States.

AutoNation franchised stores, AutoNation USA stores and other AutoNation locations 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 additional 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.”

On CNBC-TV’s “Squawk Box” Thursday morning, CEO Mike Jackson said two major hurricanes in two markets were “unprecedented,” but that :even with all that disruption, same-store sales were up.” Before Irma, some AutoNation vehicles were flooded in Houston’s Hurricane Harvey.

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.

In 2016, the company announced it is investing $500 million in 2017 and 2018 to leverage its nationwide brand through opening AutoNation USA used-car stores, collision centers and auction houses, and selling branded parts and accessories.

On Wednesday, AutoNation stock closed at $47,60, up 20 cents or 0.42 percent in New York Stock Exchange trading.

AutoNation is scheduled to hold a conference call with analysts at 11 a.m.

This story will be updated. Check back for more information. or 561-243-6650, twitter: @marciabiz

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