Auto dealership companies posted better-than-expected third-quarter earnings, countering heavy price competition with cost controls and growth in side businesses like parts, service, and F&I, according to the Wall Street Journal.

Despite a wave of hot new models such as Ford Motor Co.'s 2003 F-150 pickup trucks, deep discounts and other incentives this year have

pressured auto dealers' profitability in new car sales, the Journal said. The aggressive pricing on new cars additionally has diverted bargain-hunting shoppers' attention from used cars, which typically carry higher margins, according to the Journal.

But the costs of discounts and incentives on new cars have been born mainly by the Big Three Auto manufacturers, not the dealers, Mike Jackson,

chairman and chief executive of AutoNation Inc., told analysts in a Oct. 30 conference call.

That has helped keep profits intact and at the

same time has "kept the marketplace at very strong volume levels," Jackson said.

The trend also benefited competitors Asbury Automotive Group Inc. and Group 1 Automotive Inc., the Journal reported.

Results at all three companies topped analysts' expectations, driving their shares higher, according to the Journal.