By Kevin Krolicki
DETROIT, Feb 19 (Reuters) - Group 1 Automotive Inc, a leading U.S. auto dealership group, posted a fourth-quarter loss and said it would cut jobs and orders and suspend expansion plans and its dividend to save cash.
Group 1 Automotive Chief Executive Earl Hesterberg said the dealership group planned to cut 5,000 to 6,000 new vehicles from its inventory in the current quarter by reducing orders from brands like Toyota, Honda, Nissan and Ford.
That would represent a 27 percent cut in the auto retailer's inventory and comes at a time when U.S. auto sales are near their lowest level in three decades.
'There are going to be some months where some of our dealers only order a few vehicles. Their orders are going to be just a handful,' Hesterberg said.
The ongoing slowdown in vehicle orders from Group 1 and other dealership groups points to continued pressure on automakers, which book sales when cars are shipped.
Houston-based Group 1, which draws most of its sales from Texas and California, plans to cut $100 million in costs this year.
Some $65 million of those savings will come through job cuts at the dealerships, Hesterberg said.
Hesterberg said February auto sales at Group 1's roughly 100 dealerships were running about flat from the depressed levels of October through January. 'Thus far, I don't see and change from October to last weekend,' he said.
Group 1 posted a fourth-quarter net loss of almost $45 million after taking charges to write down store values amid the sharp decline in industry-wide auto sales.
On an operating basis and excluding one-time items, the auto retailer topped analysts' expectations after cutting $20.5 million in costs during the fourth quarter.
Group 1 said it was suspending its quarterly dividend and forecast that U.S. auto sales for 2009 would fall to a range of between 10.5 million and 10.8 million vehicles, down from about 13.5 million in 2008.
LOSS AFTER WRITE-DOWN
Group 1 posted a net loss of $44.5 million, or $1.96 per share, from continuing operations compared to a profit of $6.3 million, or 28 cents per share, a year earlier.
Revenue fell 24 percent to $1.1 billion.
Excluding $67 million in noncash charges to write down the value of past dealership acquisitions in a slumping auto market and a one-time gain of $20.9 million on a debt repurchase, the dealership group had an operating profit of 8 cents per share.
That compared with an average forecast for a profit of 4 cents per share on that basis, according to Reuters Estimates.
Revenue from new vehicle sales dropped 33 percent, while revenue from used cars and trucks dropped almost 20 percent.
Group 1 said in January it would cut $100 million in costs after what it called a 'massive deterioration' in industry-wide auto sales in the fourth quarter.
A majority of its new car sales in the fourth-quarter were from Japanese automakers. Almost 36 percent of its new car sales in the fourth quarter came from Toyota Motor Corp. Honda Motor Co and its Acura brand were No. 2 at 13 percent of sales, followed by Nissan Motor Co at 11 percent.
Ford Motor Co represented 10 percent of sales.
Group 1's lower U.S. auto sales forecast is broadly in line with the views offered by General Motors Corp and Chrysler LLC as part of the restructuring plans the two automakers submitted to U.S. officials this week as part of a request for up to an additional $22 billion in aid.
Dealers were active in lobbying lawmakers to support the first $17.4 billion granted to the two automakers and Hesterberg said they would support the new request as well.
'We'll certainly do our best to support GM and Chrysler with the new administration,' he said.
(Reporting by Kevin Krolicki, editing by Dave Zimmerman) Keywords: GROUPONE/ (email: kevin.krolicki@thomsonreuters.com; +1 313 967 1902) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
DETROIT, Feb 19 (Reuters) - Group 1 Automotive Inc, a leading U.S. auto dealership group, posted a fourth-quarter loss and said it would cut jobs and orders and suspend expansion plans and its dividend to save cash.
Group 1 Automotive Chief Executive Earl Hesterberg said the dealership group planned to cut 5,000 to 6,000 new vehicles from its inventory in the current quarter by reducing orders from brands like Toyota, Honda, Nissan and Ford.
That would represent a 27 percent cut in the auto retailer's inventory and comes at a time when U.S. auto sales are near their lowest level in three decades.
'There are going to be some months where some of our dealers only order a few vehicles. Their orders are going to be just a handful,' Hesterberg said.
The ongoing slowdown in vehicle orders from Group 1 and other dealership groups points to continued pressure on automakers, which book sales when cars are shipped.
Houston-based Group 1, which draws most of its sales from Texas and California, plans to cut $100 million in costs this year.
Some $65 million of those savings will come through job cuts at the dealerships, Hesterberg said.
Hesterberg said February auto sales at Group 1's roughly 100 dealerships were running about flat from the depressed levels of October through January. 'Thus far, I don't see and change from October to last weekend,' he said.
Group 1 posted a fourth-quarter net loss of almost $45 million after taking charges to write down store values amid the sharp decline in industry-wide auto sales.
On an operating basis and excluding one-time items, the auto retailer topped analysts' expectations after cutting $20.5 million in costs during the fourth quarter.
Group 1 said it was suspending its quarterly dividend and forecast that U.S. auto sales for 2009 would fall to a range of between 10.5 million and 10.8 million vehicles, down from about 13.5 million in 2008.
LOSS AFTER WRITE-DOWN
Group 1 posted a net loss of $44.5 million, or $1.96 per share, from continuing operations compared to a profit of $6.3 million, or 28 cents per share, a year earlier.
Revenue fell 24 percent to $1.1 billion.
Excluding $67 million in noncash charges to write down the value of past dealership acquisitions in a slumping auto market and a one-time gain of $20.9 million on a debt repurchase, the dealership group had an operating profit of 8 cents per share.
That compared with an average forecast for a profit of 4 cents per share on that basis, according to Reuters Estimates.
Revenue from new vehicle sales dropped 33 percent, while revenue from used cars and trucks dropped almost 20 percent.
Group 1 said in January it would cut $100 million in costs after what it called a 'massive deterioration' in industry-wide auto sales in the fourth quarter.
A majority of its new car sales in the fourth-quarter were from Japanese automakers. Almost 36 percent of its new car sales in the fourth quarter came from Toyota Motor Corp. Honda Motor Co and its Acura brand were No. 2 at 13 percent of sales, followed by Nissan Motor Co at 11 percent.
Ford Motor Co represented 10 percent of sales.
Group 1's lower U.S. auto sales forecast is broadly in line with the views offered by General Motors Corp and Chrysler LLC as part of the restructuring plans the two automakers submitted to U.S. officials this week as part of a request for up to an additional $22 billion in aid.
Dealers were active in lobbying lawmakers to support the first $17.4 billion granted to the two automakers and Hesterberg said they would support the new request as well.
'We'll certainly do our best to support GM and Chrysler with the new administration,' he said.
(Reporting by Kevin Krolicki, editing by Dave Zimmerman) Keywords: GROUPONE/ (email: kevin.krolicki@thomsonreuters.com; +1 313 967 1902) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.