AutoNation Expects Hit to Q2 Profit From CDK Outage

U.S. auto retailer AutoNation said on Monday it expects a $1.50 per share hit to its second-quarter profit due to the disruptions caused by a cyberattack at retail technology provider CDK in June, a crucial selling period for car dealers.

The attack prompted CDK to take down its dealer management system (DMS), used by over 15,000 retail locations, making it the latest roadblock for the auto industry that is recovering from supply-driven challenges.

AutoNation now expects its earnings per share for the quarter ended June 30, to be between $3.15 and $3.30, significantly lower than analysts’ expectations of about $4.50, according to LSEG estimates.

The company said the CDK outage adversely impacted its business, including productivity, but does not expect the incident to have a material impact on its overall financial condition or its operations.

It also said most operations including the DMS and core functions were restored, while some ancillary systems and integrations remain unavailable or limited.

“We expect to complete the restoration of all such systems and integrations prior to the end of July 2024,” AutoNation said.