DETROIT -- Asbury Automotive Group Inc. on Wednesday posted a higher-than-expected 24 percent increase in quarterly profit, but the car dealership group said it sees 2005 earnings at the lower end of its forecast range.
Asbury's third-quarter profit rose to $15 million, or 45 cents per share, from $12.1 million, or 37 cents per share, a year earlier, boosted by gains in its service business as well as strong sales of new vehicles.
Income from continuing operations for the quarter was 53 cents per share, which includes a 1 cent restructuring charge. Wall Street analysts on average had expected the company to post earnings of 48 cents a share, according to Reuters Estimates.
Revenues rose 13 percent to $1.4 billion, while same-store sales were up 11 percent.
"Our service businesses -- fixed operations and finance and insurance -- again delivered double-digit same-store gross profit growth," said Asbury President and Chief Executive Ken Gilman.
Gilman said the company faced volatile used-car wholesale prices, particularly for trucks and large SUVs, during the third quarter.
The third quarter was marked by big employee discounts from U.S. automakers, which helped reduce swollen inventories of unsold new vehicles at many dealerships.
Asbury said it has agreed to sell all its remaining operations in Oregon. The sale, which is expected to be completed in the fourth quarter, is forecast to generate about $60 million in cash and result in a gain of 5 cents to 7 cents per share.
The company said it expects to earn at the lower end of its full-year estimate of between $1.71 to $1.77 per share because of soft October new vehicle sales and uncertainty surrounding fourth-quarter incentives from automakers.
The outlook includes a charge of 3 cents a share for the restructuring of its operations. The restructuring, which was completed in the third quarter, is expected to generate savings of about 10 cents a share in 2006.