DETROIT -- Group 1 Automotive Inc., an operator of car dealerships, on Thursday slashed its quarterly and full-year earnings outlook due to weak sales and a charge for damage from a hailstorm.
The revised outlook from the Houston company comes less than a week after rival AutoNation Inc. cut its earnings outlook, citing weaker sales in June for Ford Motor Co. and General Motors vehicles.
Group 1 said it cut its forecast for 2004 earnings to a range of $2.95 to $3.15 per share, down about 8 percent 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 Thursday.
Analysts' estimates ranged between $3.15 to $3.30 per share, with an average of $3.25 per share, according to Reuters Research.
Group 1 said it expects to report second-quarter earnings in the range of 65 cents to 69 cents per share, below Wall Street estimates. Analysts had expected second-quarter earnings of between 83 cents to 94 cents per share, with an average forecast of 91 cents per share.
The second-quarter outlook includes a charge of about 8 cents per share from a hailstorm that damaged or destroyed more than 1,000 vehicles, or about 95 percent of the inventory, at dealerships in Amarillo, Texas.
Group 1 said sales have been less-than-expected at some of its dealerships, particularly for its Ford Motor Co. and Toyota Motor Corp. stores, which account for about 40 percent of the company's new-vehicle sales.
U.S. 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 GM, which lost market share to Asian rivals.