DETROIT --Sonic Automotive and Group 1 Automotive, the nation's third- and fourth-largest auto dealership groups, both said today they posted improved third-quarter profits, powered by increased new-vehicle revenue.
Sonic reported a net income of $19.4 million, or 33 cents a share, compared with $13 million, or 23 cents a share, a year ago. Revenue for the Charlotte, N.C.-based company rose to $1.99 billion from $1.77 billion. New-vehicle revenues increased 13 percent, the company said in a statement.
Sonic said it saw even greater gains in its used vehicle revenue, up 17 percent from the same quarter last year.
Overall, Sonic said it posted its tenth consecutive quarter of double-digit growth.
"We saw continued growth both in the overall industry trends and in Sonic's third quarter results," Jeff Dyke, the company's executive vice president of operations, said in a statement. "New and used revenue saw double digit growth, which translated into a 39 percent increase in continuing operations profit compared to the same period last year."
Scott Smith, the company's president, said sales were aided by the production recovery at Japanese automakers following the March 11 earthquake in Japan.
"We expect this momentum to continue into the fourth quarter as these brands return to a normal production cycle," Smith said in a statement.
Group 1 results
Meanwhile, Houston-based Group 1 said third-quarter net income was $21.5 million, or 94 cents a share, up from $19 million, or 83 cents a share, a year ago. Adjusted earnings were $1.04 a share. Revenue rose 7.4 percent to $1.57 billion.
Group 1's new-vehicle revenue increased 5 percent in the quarter to $862.7 million, the company said in a statement.
Group 1 CEO Earl Hesterberg said the retailer generated its third-best quarterly performance of all time despite shortages of key Japanese-brand vehicles and sinking used-vehicle prices. The shortages helped boost prices, increasing new vehicle gross profit by 19.3 percent even as unit sales dropped 2.3 percent.
The dealership group had expected vehicle supplies to be in better shape by now.
Most of Group 1's Honda, Toyota and Lexus stores reached their lowest inventory levels of the year in late September, Hesterberg said. The company ended the quarter with Toyota inventory at 34 days and Honda inventory at 25 days -- and the lots were largely empty of those automakers' most popular models, such as the Toyota Camry and RAV-4 and the Honda CRV.
"We got hammered in Toyota and Honda," Hesterberg said. "We just didn't have cars to sell."
Sonic ranks No. 3 on the Automotive News list of the top 125 U.S. dealership groups with 99,565 new-vehicle sales in 2010. Group 1 ranks No. 4 on that same list with 97,511 new-vehicle sales last year.
Amy Wilson and Danielle Emerson contributed to this report.