Tag - Automotive

Dollar Thrifty Automotive Group Inc. (NYSE:DTG) said Tuesday it will not meet its previous full-year earnings estimates, news that pushed shares down 20%. The car rental company said its 2008 revenue will be down because of difficult operating trends, which have led to lower daily revenues and vehicle depreciation costs. Lower-than-expected earnings for the second quarter are also contributing to this year’s outlook. Dollar Thrifty’s full-year earnings per share will not meet the previous estimate of $1.00 to $1.50, the company said. The Tulsa, Okla.-based company will report second-quarter earnings on Aug. 5.

On Tuesday, Dollar Thrifty Automotive Group's shares were at $7.45, down $2 from Monday’s close. The company’s stock has lost 68.9% since January of this year.

American Axle & Manufacturing Holdings, Inc. (NYSE:AXL) shares continued to drop Thursday on no fresh news although the car-part maker confirmed earlier in the week it is contemplating salaried job cuts. The Detroit-based company already has plans to close one plant due to declining demand from the auto industry. Shares of the American Axle hit a 52-week low of $8.77, down about 13% from Wednesday’s close.

America's Car-Mart, Inc. (Nasdaq:CRMT) announced Thursday it had tripled its fourth- quarter earnings, which sent its stock up more than 15%. The Bentonville, Ariz.-based company had net income of $6 million, or $0.51 per share, compared with $2.1 million, or $0.17 per share, for the same quarter a year ago. The fourth-quarter results beat analyst estimates of $0.29 per share. The automotive retailer said the improved earnings were the result of both improved advertising and car selections. America’s Car-Mart traded at $16.92, up about 15.1% from Wednesday’s close.

Drew Industries, Inc. (NYSE:DW) CEO Leigh Abrams said 2008 is turning out to be a “very challenging year” for the White Plains, N.Y.-based RV and manufactured homes maker. Abrams made the comments during a midday Monday conference call.

“The turmoil in the real estate industry and the mortgage markets and the focus on recession all have severely impacted consumer confidence, which was recently at its lowest level in the last five years,” Abrams said. “Generally, under such conditions, purchases of discretionary big-ticket items such as RV and boats slow down. In spite of these conditions, we are pleased with our first-quarter results.”

The possibility of new legislation for Title 1 programs, which provide Federal Housing Authority-backed mortgages, would help boost the manufactured homes industry, the CEO said. Proposed legislation would boost the amount that the FHA is allowed to guarantee on a manufactured home to about $70,000 from less than $50,000.

“If this legislation is finally enacted, it could represent a good boost for the manufactured housing industry,” Abrams said.

The chief executive said the remainder of 2008 remains a “puzzle.”

“My gut tells me that RV total sales will be down more than 10%, which conforms to the projection of the [Recreational Vehicle Industry Association] of a 13% decline in shipments of fifth-wheel RVs,” Abrams said. “My gut also tells me that this will be the first year that is not aided by hurricane-related housing in a long time. We will . . .

The transport of people, materials and goods are crucial to China's monumental infrastructure build-out and its continued economic development. The nation's growth is pushing demand ever higher for passenger bus and commercial truck fleets, which is evidenced by a surge in truck and bus sales in China. In 2007, light truck sales rose 16%, heavy-duty truck sales soared $60% and bus sales were up some 20%.

As the demand for commercial vehicles continues to grow, the fortunes of Sorl Auto Parts, Inc. (Nasdaq: SORL), China’s largest manufacturer of commercial vehicle air brake systems, stand to follow. SORL manufactures, markets and distributes a comprehensive line of over 40 categories of air brake valves and components for commercial vehicles weighing over three tons, such as hand and foot brake valves, spring brake chambers, exhaust relay valves, air dryers and clutch servos (pressure boosters).

Since commercial vehicles' added weight means they take up to 40% farther than cars to stop, top-notch, braking systems are essential for truck and bus safety. With a strong reputation for using state-of-the-art technology to develop and build the highest quality and most advanced air brake systems in China, SORL is routinely awarded the "Top Supplier" designation for air brake systems by its major customers.

The only company in China that specializes in air brake valve systems exclusively, SORL has superior brand recognition and an extensive national distribution network that gives it a decisive advantage over its competitors, allowing the company to control the lion's share of a highly fragmented domestic market.

SORL has acquired vast experience in its specialty niche and forged solid relationships with China's 29 major automotive original equipment manufacturers (OEM), including Beiqi Foton, China's largest light truck manufacturer. The company also has a strong brand presence in the auto parts aftermarket, with exclusive contracts with close to 30 authorized distributors who only sell SORL-branded parts through over 800 sub-distributors nationwide.

CSK Auto Corp. (NYSE: CAO) shares are plummeting after the auto parts retailer disclosed in a regulatory filing that it is seeking an amendment to its credit agreement in order to minimize the possibility it won’t be able to comply with its current credit agreement.

The Phoenix, Ariz.-based company is attempting to lower its fiscal 2008 fixed charge coverage ratio — a proportion that indicates a firm’s ability to meet its financing expenses such as leases and interest — to a range of 1.15 to 1.25, from a current 1.40.

CSK Auto also wants to change its fiscal 2008 leverage ratio — a measurement used to estimate a company’s ability to meet financial obligations — to a range of 4.50 to 6, from its current range of 3.25 to 4.

The company previously disclosed that its second-quarter net sales decreased compared to a year earlier. CSK said it anticipates that its auto segment will not be in compliance with its current credit agreement at the end of the fourth quarter. Although the firm said it expects the auto segment to be able to obtain an amendment to its credit agreement, CSK said “no assurance can be given that the company will be successful in doing so or at what price such amendment can be obtained.”

CSK expects to file its quarterly report on or before Dec. 19.

Cid Wilson, a senior analyst for research firm Kevin Dann & Partners LLC, lowered his rating on the company to “hold” from “buy” with a 12-month price target of $10.

“It appears hitting targets on debt covenants continues to challenge the company,” Wilson said. “The concern here is that the new covenants brings to question what the cash flow situation is.”