The fourth largest US dealer group, Group 1 has posted a quarterly profit double that of a year ago but has a cautious outlook for the current quarter. Third largest Sonic Automotive also reported a third quarter profit compared with loss in 2008 after refinancing debt late in September.
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Sonic projected 2010 sales would be flat from this year’s depressed levels of near 10.5m vehicles in the US market, Reuters reported.
The US government’s ‘cash for clunkers’ scheme boosted sales at both dealer groups but there is now the prospect of a slow finish to 2009 with auto sales off 27% to the end of September.
Sonic’s 10.5m projection is lower than CSM Worldwide’s forecast of 11.8m cars and light trucks and JD Power’s expectation of 11.5m vehicle sales in 2010.
“If the other guys are right, we’ll take that too. We’re just planning our business conservatively,” Sonic chief financial officer Dave Cosper told Reuters.
For the full year, Group One forecast earnings per share of US$1.66 to $1.76. That would imply fourth-quarter earnings of between 31 cents and 41 cents per share. Analysts on average had been expecting fourth-quarter earnings of 39 cents per share.
For the third-quarter, it posted adjusted income of $16.8m, or 71 cents per share, compared with $8.2m, or 37 cents per share a year earlier.
Sonic reported third-quarter earnings from continuing operations of $15.6m, or 22 cents per share, compared with a loss of almost $27m, or 38 cents in the same quarter a year earlier.
Group One said it had reduced annual costs by almost $113m by the end of the third quarter from 2008 levels – most from the 1,850 jobs it cut this year.
AutoNation is scheduled to announce quarterly results on Thursday and Penske reports on Friday.
