Group 1 Automotive Inc. (GPI) announced that it is evaluating the extent of damage at four dealerships in New Orleans, which were affected by the hail storm on Feb 24.
According to the assessment, some of the facilities and inventories consisting of new and used vehicles were damaged. The company has informed that they are insured but it has to incur after-tax charges related to deductibles in the range of $1.1 million to $1.4 million or 3 cents per share in the first quarter of 2013.
Group 1 Automotive plans to replace the damaged inventories in the near term together with its manufacturing partners. The affected dealerships of the company will continue to operate, providing an array of services along with offering vehicle parts to its customers and collision centers. However, sales operation will be limited until the inventories are fully replaced.
These four dealerships accounted for 2.5% of new vehicles sales in 2012 and consist of 5 franchises including Ford Motor Co. (F), Buick, GMC, Hyundai and Toyota Motor Corp. (TM).
Headquartered in Memorial City of Houston, Texas, Group 1 Automotive was founded in 1997. The company is one of the largest automotive retailers in U.S., which provides 35 automotive brands. It has 142 automotive dealerships, 182 franchises and 36 collision centers in the U.S. and the U.K.
Group 1 Automotive posted a 5.3% rise in earnings per share to 99 cents in the fourth quarter of 2012 from 94 cents in the prior-year quarter but missed the Zacks Consensus Estimate by 21 cents. Net income grew 9.4% to $24.0 million from $22.0 million in the fourth quarter of 2011.
Revenues increased 19.3% to $1.9 billion, driven by strong retail new vehicle and used vehicle unit sales. The company retains a Zacks Rank #3 (Hold).
Lithia Motors (LAD), with a Zacks Rank #2 (Buy), is performing well in the industry where Group 1 Automotive operates.
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