AutoNation Inc., the nation's largest automotive retailer, reports its fourth-quarter results before the stock market opens Thursday.
WHAT TO WATCH FOR: Any sign that things are getting better for car sellers.
U.S. automakers ended their worst year in almost three decades with hints of a recovery in December, a positive finish to a very rough 12 months.
U.S. sales of cars and light trucks fell 21 percent to 10.4 million in December as people motored past showrooms, but dealerships did see the traditional post-Christmas rush by bargain hunters. That means while people may not spend top dollar for a car, they will buy with the right incentives.
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Earlier this decade U.S. auto sales exceeded 16 million vehicles a year, a number many say was unsustainable because automakers were producing more vehicles than the market would buy.
Investors also are watching to see if AutoNation will announce plans new acquisitions and stock buybacks.
WHY IT MATTERS: The Fort Lauderdale, Fla. company owns about 245 new-vehicle franchises in 15 states. Recovery of sales would suggest more consumer credit and spending. That is a critical element in bringing an end to the worst economic downturn since the Great Depression.
Possibly even more key are signs of stabilization in Florida and California, states rocked by home foreclosures over the past several years.
WHAT'S EXPECTED: Analysts polled by Thomson Reuters expect AutoNation to earn 27 cents per share and to post revenue of $2.67 billion.
LAST YEAR'S QUARTER: AutoNation reported profit of 38 cents per share, including a tax adjustment and the buyback of some debt. Excluding those charges, the company posted an adjusted profit from continuing operations of 12 cents per share on revenue of $2.74 billion.