Auto retailer AutoNation Inc., the largest U. S. auto dealership group on Thursday reported higher revenue and higher new-vehicles sales as the industry extended signs of a steady recovery from one of its worst downturns ever, although net income fell mainly as a result of higher income taxes.

The dealership group, whose shares were up 1.4 percent in premarket trade, posted its revenue to climb by 8% in the fourth quarter, to $2.8 billion from $2.6 billion. It sold 46,532 vehicles, a 7% increase over the year-ago period when it sold 43,370.

In addition, the firm's net income squeezed to $61.7 million or 35 cents a share, from $67.1 million, or 38 cents a share. Excluding one-time items, AutoNation revealed earnings from continuing operations of 29 cents per share.

However, Analysts on average speculated 27 cents, according to Thomson Reuters I/B/E/S.

"February will be a disrupted month from a sales point of view," Jackson told Reuters in a telephone interview.

For 2010, the company expects U. S. auto industry sales touch 11.5 million vehicles, representing about a 15 percent increase over 2009 excluding the U. S. government "cash for clunkers" program that propped up sales last year.