AutoNation CEO: ‘Economy Is Much More Competitive’ Due To Tax Reform

Written by on 02.06.18 in Investment Trends, Office, Retail - No comments

After his company just reported fourth quarter earnings, AutoNation CEO Mike Jackson appeared on CNBC‘s “Squawk Box” to talk about the its “momentous” quarter.

“AutoNation’s quarter is exceptional” says Jackson.

While Jackson discussed why the Fort Lauderdale-based company was able to grow sales in the last quarter, he also spent some of his time on the financial news network to talk about “historic tax reform.”

“As a result of the tax bill, the U.S. economy is much more competitive, it will grow faster and it is is very beneficial to AutoNation,” says Jackson. “It put us in a position to significantly increase the benefits to our long-term employees, we doubled our contribution to 401(k), workers’ comp. All of which was not anticipated that corporate America would do.”A

Jackson had previously called for a tax reform to lower the corporate tax rate. His long-awaited wish finally came true on Dec. 19, when Congress passed the Tax Cuts and Jobs Act, which reduced the effective federal income tax rate to 21 percent from 35 percent.

The new legislation had a big impact on AutoNation‘s bottom line. It increased the company’s fourth quarter net income from continuing operations by $41 million, or 45 cents a share. With the savings, AutoNation aims to double the match for its 401(k) plan. It also plans to double the match of its deferred compensation plan of up to 100 percent of the first $5,500 contributed.

In the fourth quarter, the company’s total revenue increased by 4 percent, to $5.7 billion. Fourth quarter net income from continuing operations increased 44 percent, to $152 million.

AutoNation is America’s largest automotive retailer. As of Dec. 31, AutoNation owned and operated 360 new vehicle franchises in the U.S. and had sold more than 11 million vehicles.

 

 

Source: SFBJ

 

 

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