AutoNation to Divest Rental Car Business

AutoNation Inc. plans to separate its lackluster rental car business, which includes the National Car Rental and Alamo Rent-a-Car chains, from its growing auto sales operations as Chairman H. Wayne Huizenga moves to boost the firm’s lagging stock price. The nation’s largest car retailer also said its president and chief operating officer, John H. Costello, resigned after seven months in the job to pursue online ventures, a month after co-Chief Executive Steven Berrard said he would leave to start his own investment firm. Costello will be replaced by Michael Maroone, former president of AutoNation’s automotive retail group. AutoNation, which was spun off from Republic Industries Inc. earlier this year, said it is still reviewing options on how to divest the rental business. Analysts said a spinoff is the most likely option, either in whole or parts. AutoNation also reported a 79% jump in second-quarter profit from continuing operations, which excludes the rental car business, to $97.1 million, or 21 cents a share, from a year ago. Revenue rose 60% to $5.1 billion. Car rental revenue rose 3.2% to $893 million. AutoNation shares rose 31 cents to close at $15.25 on the New York Stock Exchange, below their 52-week high of about $21.06.