Clunkers offset revenue drop at auto chain

By Gertha Coffee

The Atlanta Journal-Constitution

The federal Cash for Clunkers program and cost-cutting helped Duluth-based Asbury Automotive Group post a 35 percent profit gain in the third quarter, despite a 12 percent revenue drop.

Third quarter profit at the 81-dealer auto retailer rose to $7.4 million, or  22 cents per share, from $5.5 million, or 17 cents per share, a share ago. Income from continuing operations rose to $9.5 million, or 29 cents per share, from $6.9 million, or 21 cents per share, for the same period last year.

Current quarter results include one time restructuring and other charges of  2 cents per share compared with 3 cents per share in the third quarter last year.

Third quarter revenues totaled $983 million, down from $1.1 billion a year ago, primarily because of a drop in new vehicle sales that was only partially offset by the clunkers program, the company said.

Asbury shares fell about 3.7 perecent Thursday, to $11.26, in regular hours trading Thursday.

With the Clunkers program ending in September, the industry now is working through a very gradual recovery, said Craig Monaghan, Asbury's senior vice president and chief financial officer.

"I think the industry is slowly recovering," he said. " September sales were very much in line with the first half of the year, but October is feeling a little better."

Asbury moved its headquarters from New York to Georgia last year, cutting corporate staff and other costs. It is one of the nation's largest automotive retailers, with 2008 revenue of about $4.6 billion.  Asbury operates 81 retail auto and heavy truck stores, including 12 dealerships in Atlanta as part of the Nalley Automotive group.

-- The Associated Press contributed to this report.