DETROIT -- Auto dealer UnitedAuto Group Inc. on Wednesday reported a sharp drop in its fourth-quarter earnings after the company took a $13.6 million aftertax charge to settle some contracts.
UnitedAuto said it earned $652,000, or 2 cents per share, compared with a profit of $11.3 million, or 32 cents per share, in the same quarter a year ago. Revenues rose to $1.88 billion from $1.52 billion.
Excluding the charge, UnitedAuto had a profit of 34 cents per share. Analysts had expected UnitedAuto to earn between 27 cents to 38 cents per share, with an average estimate of 32 cents per share.
The company said the fourth-quarter charge was related to the settlement of some long-term contracts that were related to acquisitions made in 1996. The company also said a noncompetition agreement with a former member of management has no future value.
Despite the slowdown in U.S. vehicle sales from record levels in the fourth quarter of 2001, UnitedAuto of Detroit and other automotive dealership groups have been increasing their revenues in recent years by expanding their operations in such areas as service and repair.