Brisk new-vehicle sales, bad weather and rising gasoline prices afflicted business at ADESA Inc. in the third quarter of 2005.
The auction company reported an operating profit of $55.9 million in the three months that ended Sept. 30. That figure was down from $56.3 million in the year- ago period.
ADESA, of Carmel, Ind., reported quarterly net income of $31.5 million on revenues of $241.0 million. The company had net income of $21.5 million on revenues of $227.0 million in the year-ago quarter.
"Overall, we're very satisfied with the resiliency of ADESA's business model," company CEO David Gartzke told analysts in an Oct. 28 conference call.
The Big 3's summer employee discount programs slashed inventories of new 2005 models and boosted trade-ins. Many franchised dealerships held onto trade-in vehicles rather than send them to auction, Gartzke said.
As a result, he said, fewer vehicles were available for independent used-car dealers. Those dealers buy 70 percent of vehicles sold at ADESA auctions.
Independent used-vehicle sales fell by 3.3 percent in the third quarter of 2005 compared with the year-ago period, Gartzke said.
ADESA reported $438 in revenue per vehicle sold in the third quarter. That was up 6 percent from the year-ago quarter.
Revenue per loan transaction by ADESA's captive finance company was $119 during the quarter. That was a 12 percent increase over the same period in 2004.
Hurricanes Katrina and Rita did not damage ADESA auction sites, Gartzke said. But the economic uncertainty created by the storms helped depress sales and prices of used SUVs, he said.
"The mid-sized and full-sized SUV segments experienced year-over-year used-vehicle price declines of 13 percent and 9 percent, respectively," Gartzke said. "Short-term price movements of this magnitude have disrupted the auction market for these high-volume vehicles."
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