AutoNation (NYSE:AN) shares climbed 5.60% in premarket trading on Friday after the automotive retailer reported third-quarter 2026 revenue above analyst expectations, supported by record after-sales profitability and strong growth in its financing business.
The company posted adjusted earnings per share of $5.11, slightly below Wall Street’s consensus estimate of $5.17. However, revenue reached $7.0 billion, exceeding expectations of $6.93 billion and remaining unchanged from the previous year.
Adjusted EPS increased 2% from $5.01 a year earlier, marking the seventh consecutive quarter of year-over-year growth.
After-Sales and Financing Businesses Drive Growth
Parts and service revenue increased 5.2% to $1.29 billion, helping AutoNation achieve record after-sales gross profit.
The AutoNation Finance portfolio expanded more than 40% year over year, while profits from the financing business increased tenfold.
“Our team delivered another solid quarter, growing adjusted EPS for the seventh consecutive quarter,” said Mike Manley, Chief Executive Officer. “Record After-Sales performance and strong growth in AutoNation Finance further increased the contribution of recurring earnings and cash flow, leading to exceptional cash generation and disciplined capital allocation.”
Vehicle Sales Decline Despite Stronger Profitability
Same-store new vehicle retail sales declined 5.3%, while used vehicle retail unit sales fell 6.3%.
Despite weaker vehicle volumes, growth in higher-margin after-sales services and financing helped support profitability and offset pressure on the company’s core retail operations.
AutoNation Expands Share Buyback Programme
AutoNation repurchased $620 million of shares during the first nine months of 2026, reducing its outstanding share count by 9%.
The company’s board also authorised an additional $1.0 billion in share repurchases.
Adjusted free cash flow totalled $739.0 million during the nine-month period, representing 141% of adjusted net income.
The positive market reaction reflected investor confidence in AutoNation’s expanding recurring earnings, strong cash generation and shareholder returns, despite the modest quarterly earnings miss and declining vehicle sales.