Tag - Gpi

Group 1 Automotive, Inc. (NYSE:GPI) CEO Earl Hesterberg said the auto dealer is being hurt by record-low new vehicle sales and weak consumer confidence. Hesterberg made the comments during a morning conference call with investors and analysts.

“The overall selling environment certainly got more challenging during the second quarter. Beginning with Memorial Day weekend, the market took another significant step down,” Hesterberg said. “Customer traffic declined further as consumer confidence was again shaken due to the higher gasoline prices and issues surrounding the financial markets.”

Because of high gas prices, the shift to cars from trucks in terms of units sold is “unprecedented in magnitude,” he said.

In a morning press release, Group 1 lowered its 2008 guidance for income from continuing operations — excluding one-time costs — to a range of $2.65 to $2.95 per share, from a previous range of $2.95 to $3.25 per share. Wall Street expects earnings of $2.68 per share.

Blaming a weak economic environment, the firm additionally lowered its acquisition revenue estimate to $200 million from $300 million.

Before Tuesday’s opening, the Houston-based company said its second-quarter profit dipped to $17.2 million, or $0.76 per share, versus $24.2 million, or $1.01 per share, a year ago. Excluding one-time charges related to franchise disposals, income from continuing operations was $19 million, or $0.84 a share. The results beat Wall Street’s expectation of earning $0.70 per share.

Quarterly revenue declined to $1.58 billion from $1.65 billion a year earlier. Wall Street analysts expected revenue of $1.63 billion.

In the midst of a challenging quarter, the CEO said there were some bright spots. Group 1’s parts and service segment and its finance business continue . . .

Group 1 Automotive, Inc. (NYSE:GPI) CEO Earl Hesterberg said the auto retailer will close underperforming stores going forward. The firm plans to incur between $10 million and $15 million in closing and related costs during 2008. Hesterberg made the comments during a morning conference call.

Along with negatively impacting sales, the CEO said the auto industry’s slowdown has hurt the firm’s inventory levels. New vehicle inventory grew to 71 days’ supply from 63 days a year earlier.

“We need to reduce our truck inventory in the second quarter,” Hesterberg said.

The Houston-based company announced before Tuesday’s opening that its first-quarter net income slipped to $16.4 million, or $0.73 per share, compared with $17.5 million, or $0.72 per share, a year earlier. Wall Street analysts anticipated earnings of $0.68 per share.

Quarterly revenue increased slightly to $1.53 billion, compared with $1.52 billion a year earlier. The revenue results also beat Wall Street’s expectation of . . .