Sonic Automotive, one of the largest automotive retailers in the United States with 188 new car franchises and 42 collision repair centres, has revised down its fourth quarter 2002 profit targets from $US0.62 – $0.66 per share to $0.48 – $0.52 per share and its full year 2002 earnings targets to $2.44 – $2.48 per share.
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Full year 2003 earnings targets were revised to $2.70 – $2.80 per share from $2.95 – $3.05 per share.
Chairman and chief executive officer Bruton Smith said: “Our fourth quarter estimate reflects the impact of a slower new vehicle sales environment, particularly in our domestic-branded franchises. Non-cyclical service and parts operations, however, continue to generate consistent margins and profitability.
“We are taking actions to reduce our new vehicle inventory levels and variable costs which should quickly improve earnings margins. The company experienced similar circumstances in the fourth quarter of 2000 and was able to respond to a changing sales environment aggressively and effectively.”
Based on the revised profit targets, Sonic expects earnings per share growth of over 25% in 2002. Earnings targets for 2003 include only the impact of previously announced or completed acquisitions and completed share repurchases.
