AutoNation Inc. (AN – Free Report) is the largest automotive retailer in the U.S. and is about twice the size of its nearest competitor. The company is positioned to benefit from recovery in the auto market, backed by its optimal brand and market mix as well as a disciplined cost structure. Rising average age of cars and trucks in the U.S., a robust consumer credit environment and an increase in new product offerings from automotive manufacturers is leading to a strong selling environment.

However, AutoNation operates in a highly competitive industry. In addition, the company is dependent on automakers for new vehicle inventory. Thus, any fluctuation in supply can adversely affect the results of the company.

Estimate Trend & Surprise History

Investors should note that the third-quarter earnings estimates for AutoNation have been stable over the past month.

The company surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed in one quarter. As a result, it has an average negative surprise of around 0.62% for the last four quarter. Thus, investors are eagerly awaiting AutoNation’s latest earnings report to see how it performs this time.

AUTONATION INC Price and EPS Surprise

AUTONATION INC Price and EPS Surprise | AUTONATION INC Quote

We have highlighted some of the key stats from this just-revealed announcement below:

Earnings Miss Estimates

AutoNation delivered adjusted earnings of $1.11 per share in the third quarter of 2016, which increased from $1.05 recorded in the third quarter of 2015. However, adjusted earnings missed the Zacks Consensus Estimate of $1.14. Adjusted earnings exclude a 6 cents per share negative impact related to the Takata airbag recall.

Revenues Miss Estimates

AutoNation reported revenues of $5.57 billion, up 4% year over year. However, revenues missed the Zacks Consensus Estimate of $5.62 billion.

Key Stats/Developments to Note

AutoNation announced the acquisition of three Premium Luxury franchises and one collision center as well as the award of three Premium Luxury franchise add-points. The incremental annual revenue from these is expected to be around $430 million, once the add-points are fully operational.