AutoNation, Inc. (NYSE:AN) shares traded higher on Friday in the premarket session after the company reported first-quarter results.

The company reported first-quarter adjusted earnings per share of $4.68, beating the analyst consensus estimate of $4.42. Quarterly sales of $6.69 billion outpaced the street view of $6.62 billion.

Quarterly revenues were up 4% on a same-store basis, driven by new vehicle growth of 10%.

Gross profit increased 2% year over year to $1.219 billion while operating income fell 1% year over year to $336 million.

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The company’s after-sales gross margin expanded by more than 140 basis points due to improved parts and labor rates, increased capacity utilization, and higher-value orders.

Same-store gross profit rose to $1.2 billion, up 3% from last year.

Used vehicle gross profit increased by $13 million to $123 million, as unit profit improved to $1,672 from $1,478.

This gain in used vehicle profit was slightly offset by a 2% decline in unit sales.

Adjusted operating margin in the quarter under review was flat sequentially.

AutoNation exited the quarter with cash and equivalents of $70.5 million and inventories of $3.231 billion.

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