Car dealership company Group 1 Automotive Inc. on Thursday cut its earnings outlook for the second quarter and the year due to weaker-than-expected sales and damaged vehicles from a Texas hailstorm, according to a Reuters report.

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The company reportedly said it cut its forecast for 2004 earnings to a range of $US2.95 to $3.15 per share, down about 8% from its previous range of $3.20 to $3.40 per share set in April.


The revised outlook excludes a charge of 17 cents per share from the redemption in March of some debt, but includes the positive impact of new acquisitions, including three dealerships with total annual revenues of $315 million announced on Thursday, Reuters said.


Analysts’ estimates for Group 1 earnings ranged between $3.15 to $3.30 per share, with an average of $3.25 per share, according to Reuters Research.


Group 1 also said it expects to report second-quarter earnings in the range of 65 cents to 69 cents per share, below Wall Street estimates, the report said – analysts had expected second-quarter earnings of between 83 cents to 94 cents per share, with an average forecast of 91 cents per share.

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The second-quarter outlook reportedly includes a charge of about 8 cents per share from a hailstorm that damaged or destroyed more than 1,000 vehicles, or about 95% of the inventory, at dealerships in Amarillo, Texas.


According to Reuters, Group 1 said that sales have been less than expected at some of its dealerships, particularly for its Ford and Toyota outlets, which account for about 40% of the company’s new vehicle sales.


US new vehicle sales slid to their weakest levels in six years in June, far below expectations, due in part to weak results for Ford and General Motors, which lost market share to Asian rivals, the news agency noted.