DETROIT -- Asbury Automotive Group Inc.’s restructuring effort in 2009 helped the company become more efficient and turn a profit even during the worst sales environment in more than 27 years, CEO Charles Oglesby said today.
Asbury today said it earned a $200,000 fourth-quarter profit, reversing a year-earlier loss, as new-vehicle sales recovered and cost cuts paid off. Asbury last year cut corporate staff, eliminated regional management and moved its headquarters to suburban Atlanta from New York.
“I think the sheer will of being able to recognize the things that we needed to do at the time, as well as having a longer-term vision and the staff pulling together as a team, is the way we were able to navigate our way through 2009,” Oglesby said.
Asbury’s net profit, worth about 1 cent per share, compared with a loss of $369.7 million or $11.66 per share during the fourth quarter in 2008. Oglesby said the company never thought it was in jeopardy -- even as U.S. auto sales plunged 21 percent in 2009 from 2008.
Revenue at Asbury rose 2 percent to $898.6 million.
For the year, Asbury posted net income of $13.4 million or 41 cents a share, compared with a loss of $343.7 million or $10.84 a share in 2008.
“As we look in hindsight, we didn’t know how we would end up. But we knew we would do well. We would survive,” Oglesby said. “And early in the year, many people did not have that same level of confidence in us.”
Standard & Poor’s reiterated its buy recommendation on Asbury, raising the company’s 2010 earnings-per-share estimate by 2 cents, to $1.07.
“We expect margins for the full year to benefit from rising industry sales,” S&P analyst Efraim Levy wrote in an e-mail report today. “We see cash flow used for debt reduction.”
Asbury’s heavy-truck business continued to be affected by the economy, particularly in the home-building and construction industries. In the fourth quarter, revenues from new heavy trucks declined 33 percent compared with the same period in 2008. On a pretax basis, Asbury’s heavy-truck business lost $1.6 million in the fourth quarter, driven primarily by inventory losses.
Oglesby said the company likes its current portfolio, made up primarily of luxury and midline import vehicles. But Asbury will look to “opportunistically expand” to include Ford Motor Co. and Chevrolet dealerships.
“The consumer is showing confidence for both of those franchises right now,” Oglesby said.
Income from continuing operations totaled $5 million in the quarter or 15 cents per share, compared with a loss of $352.4 million or $11.12 per share in the fourth quarter of 2008. Analysts on average had expected Asbury to earn 16 cents per share, according to Thomson Reuters I/B/E/S.
Asbury shares finished the day up 1 percent, closing at $11.71 a share on average trading volume.
Asbury ranks No. 6 on the Automotive News list of the top 125 U.S. dealership groups, with sales of 83,822 vehicles to individuals in 2008. It has 81 stores.
Reuters contributed to this report.