US: Asbury Automotive Q2 income halves
Big US auto retailer Asbury Automotive Group has posted second quarter operating income of $11.6m, or $0.36 per share, half the $21.1m, or $0.63 a share, a year ago.
Net income for the second quarter also halved to $10.9m, $0.34 a share, compared with $20.6m, $0.62 a share, a year ago, including non-core items.
First half operating income was $22.8m, $0.71 a share, compared with $23.4m, $0.69 a share, in 2007.
President and CEO, Charles Oglesby, said: "The economic environment and low consumer confidence levels in the second quarter presented a challenging backdrop for the automotive retail business. Soft retail sales in our key Florida markets, in particular, resulted in a disproportionate decline in our profitability.
"The dramatic increase in gas prices added further complexity to the business, causing a rapid shift in customer preference toward fuel-efficient cars, which placed pressure on our new and used vehicle operations. Although I remain confident that over time we can effectively manage our business to changes in the retail environment, we were not able to adequately adjust our cost structure to match the swift decline in retail sales volumes during the quarter."
Asbury has begun a restructuring plan, shutting down offices in New York and Stamford, and moving headquarters to Atlanta.
"This move will bring us closer to our dealership operations and will result in an estimated 20% reduction in our corporate personnel expense," Oglesby added.
The company has lowered its guidance for 2008 operating earnings per share to $1.20 to $1.40, from $1.80 to $2.00 previously.