AutoNation Alerts of Significant Earnings Impact Due to CDK Hack

Cyberattack Impacts AutoNation's Q2 Earnings

AutoNation Inc., one of the largest U.S. car dealership chains, has reported that a recent cyberattack significantly affected its second-quarter earnings. The Fort Lauderdale-based company disclosed that the attack on CDK Global, a key provider of dealership management systems, likely reduced its profit by approximately $1.50 per share.

Financial Impact

AutoNation estimates it will earn between $3.15 and $3.30 per share for the second quarter under generally accepted accounting principles. The cyberattack on CDK Global led to the provider's main services being offline for about two weeks, disrupting business for thousands of car retailers around the Juneteenth and July 4 holidays, as well as the crucial end-of-quarter sales period.

Service Disruptions

Although most of CDK Global's management systems are now operational, some ancillary services remain limited or unavailable. These services include those essential for automating ordering, scheduling, payment, and reporting processes, further affecting dealership operations.

AutoNation's Outlook

Despite the significant impact on second-quarter earnings, AutoNation does not expect the incident to have a lasting effect on its overall financial health or future results. The company's shares saw a drop of over 6% in pre-market trading in New York following the announcement.

As the industry recovers from the disruptions, the long-term effects on dealership operations and customer satisfaction remain areas of concern. However, AutoNation seems optimistic that its financial condition will stabilize going forward.