Asbury Posts Record Earnings in Q4 2014
Fourth-quarter F&I net per vehicle retailed rose $30 from a year ago to $1,374 for the public dealer group. That performance helped drive record earnings during the quarter.
DULUTH, Ga. — During its fourth-quarter earnings call, Asbury Automotive Group announced record earnings for the fourth quarter 2014, driven in part by an all-time high F&I net per vehicle retailed.
Fourth quarter F&I revenues for the public dealer group were up 8% compared to 2013, and F&I net per vehicle retailed was $1,374 — a $30 increase on a year-over-year basis.
“Our strategy and practice within the F&I segment of our business remains unchanged,” said David Hult, Asbury’s new executive vice president and COO. “Disciplined execution of F&I sales, processes and training creates a solid sustainable growth and result.”
Asbury reported adjusted income from continuing operations for the fourth quarter of $31.4 million, or $1.07 per diluted share, a 22% increase from the year-ago quarter. Net income for the quarter was $11.8 million, or $0.40 per diluted share, compared to $26.9 million, or $0.87 per diluted share, in the prior year period.
Keith Style, the dealer group’s senior vice president and CFO, said flow through for the company was adversely impacted by recent acquisitions and its standalone used-vehicle initiative, Q auto. During the quarter, Asbury opened its third Q auto store in Ft. Myers, Fla.
“Q auto continues to progress in line with our expectations and resulted in an EPS loss of $0.04 in the fourth quarter versus our previous estimate of $0.04 to $0.06,” Style said. “Losses for Q auto totaled $0.10 for the full year of 2014. Looking to near-term expectations, we estimate this initiative may reduce EPS by $0.04 to $0.06 in the first quarter of 2015.
“In 2014, our efforts have been largely focused on bringing our Q auto stores to life. Now, in 2015, our focus will be to bring these three stores to profitability.”
Despite these setbacks, total revenues reached $1.5 billion, and new- and used-vehicle revenues were up 9% and 12%, respectively.
“Our stores continue to produce excellent operating results by maximizing new- and used-vehicle sales opportunities, improving F&I penetration, pursuing incremental service opportunities and controlling expenses,” Asbury President and CEO Craig Monaghan said. “In total, fourth quarter revenue was up 9% and gross profit was up 10%, and we achieved an operating margin of 4.4%.”
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