Major auto retailers said sales remain strong as automakers' zero percent financing offers and other deals so far are countering the impact of the falling stock market, according to a Wall Street Journal story by Karen Lundegaard.
Reporting better-than-expected financial results for the second quarter, the retailers were upbeat about the outlook. Mike Jackson, chief executive of AutoNation Inc., the nation's largest new- and used-car retailer, said he initially was concerned about swooning equities, but July sales are equal to, if not above, those of July 2001.
Automakers' incentives, combined with many new models - "the magic formula," as Jackson called it -- are driving consumers into dealerships. The Fort Lauderdale, Fla., concern posted a 20 percent increase in net income to $103.8 million, or 32 cents a share, in the second period, boosted by strong sales and reduced interest costs.
After adjusting last year's results to exclude a gain and goodwill amortization, AutoNation said profit climbed 14 percent. Revenue rose 1.4 percent to $5.02 billion.
Net income at Houston-based Group 1 Automotive Inc. surged 36 percent to $19.1 million while earnings per share jumped 15 percent to 78 cents. The difference comes from a secondary
offering the company did late last year, which increased its shares outstanding. Revenue gained 2.7 percent to $1.03 billion.
Asbury Automotive Group Inc., which went public earlier this year, had net income of $12.8 million, or 37 cents a share, for the quarter. Revenue advanced 8.9 percent to $1.2 billion.
The results didn't improve the companies' sinking share prices, however.
Auto-retailing stocks have been hammered the past two months, along with the broader market, almost erasing all of the gains of the first part of the year.
