Three of the nations top six publicly held dealership groups reported third quarter net losses yesterday, ushering in what analysts expect to be a grim round of reporting.
Sonic Automotive Inc., which ranks third on the Automotive News list of the top 125 U.S. dealership groups, reported a $25.3 million loss, compared with $26.1 million a year ago. Group 1 Automotive Inc. -- No. 4 on the Automotive News list -- said it lost $20.6 million, although it earned $20.8 million in 2007. No. 8 Lithia Motors lost $2.4 million, compared with net earnings of $11.2 million last year.
Lithia has been restructuring operations, including selling some stores, and cutting jobs to deal with the downturn in U.S. auto industry sales. Lithia said it expects to cut store count by 27 percent, had added 15 stores to discontinued operations, and is continuing cost cuts. It has 101 stores in 13 states.
The company said it had identified $7 million of additional cuts for a planned $33 million in annualized savings.
No. 2 Penske Automotive Group Inc. and No. 6 Asbury Automotive Group report Thursday, Oct. 30. AutoNation Inc., which tops the Automotive News list, reports one week later.
Sonic predicted $4.3 million to $8.6 million in annual earnings from continuing operations, based on 42.9 million shares outstanding, compared with $114.8 million after taxes in 2007 earnings from continuing operations. Group 1 suspended its annual earnings projection, crediting a volatile economy.
Despite the grim projections, Sonics stock rose 36.1 percent to close at $2.75, regaining ground from its plunge to $2.01 this month after hitting $25.75 nearly a year ago. Stocks of Group 1 and Lithia rose 8.7 and 3.2 percent, respectively, following yesterdays market-wide upward charge.
Reuters contributed to this report