DETROIT -- Group 1 Automotive Inc. on Tuesday reported a third-quarter profit despite damage to dealerships from Hurricanes Katrina and Rita on the Gulf Coast and said it is reorganizing its sales operations to cut costs.
The company also said it will target annual earnings-per-share growth rate of at least 15 percent during the next three to five years.
Group 1's net profit for the quarter was $21.6 million, or 88 cents a share, compared with a year-earlier net loss of $9.6 million, or 42 cents a share.
The results include a 10-cent charge for asset impairments.
Wall Street analysts on average had expected earnings of 84 cents a share, according to Reuters Estimates.
"Despite the challenges of two hurricanes during the quarter, our profitability improved across the board," said Earl Hesterberg, Group 1's president and chief executive officer.
The company estimates that the hurricanes reduced third-quarter earnings 22 cents per share, which includes insurance deductibles, clean-up and repair costs, asset impairments, other direct operating losses and the estimated impact of lost sales as a result of the storms.
Total revenue for the third quarter increased 2.5 percent to $1.6 billion. On a same-store basis, excluding the six New Orleans-area dealerships affected by Hurricane Katrina, revenue grew 1.6 percent, the company said.
Group 1 said it plans to reorganize its sales operations into five regional divisions from the current 13 units.
The new structure, effective Jan. 1, eliminates the management level between the chief executive officer and the top field operating executives, Group 1 said.
Group 1 said it acquired two dealerships during the quarter, which are expected to generate $9.4 million in annual revenues.
Group 1 ranks No. 5 on the Automotive News list of the top 100 dealership groups in the United States with retail sales of 117,971 new vehicles in 2004.