Asbury Automotive Group said Wednesday it expects to report a rise in adjusted net income of more than 70 percent on a per-share basis for the third quarter. The increase comes in the wake of Asbury’s August purchase of Park Place Dealerships, the largest acquisition in company history.
Asbury, the seventh-largest U.S. dealership group as ranked by new-car sales, said it anticipates adjusted net income per diluted share will be between $4.00 and $4.08 for the third quarter. That’s an increase of up to 75 percent compared with actual results of $2.33 per share in the third quarter of 2019.
If Asbury retains the 19.3 million outstanding shares it reported having at end of the second quarter, the expected results would translate to adjusted net income of up to $78.7 million for the quarter. That compares with adjusted net income of $48.7 million in this year’s second quarter and net income of $45 million in the third quarter of 2019, a period that had no reported adjustments. Same-store gross profit is also expected to increase by up to 7 percent.
“Our strong margins, disciplined expense management and the continued recovery in parts and service once again drove solid operating performance in the quarter,” Asbury CEO David Hult said in a statement.
The Duluth, Ga., dealership group said Wednesday that third-quarter net income is expected to be adjusted for a $24.7 million gain on the sale of dealerships, a charge of $1.3 million for acquisition-related costs and a charge of $700,000 related to real estate.
The charges are likely related to the Park Place acquisition. The deal, valued at $735 million, consisted of eight stores housing 10 new-vehicle franchises. The stores are expected to generate about $1.7 billion in annual revenue for Asbury.
Asbury is scheduled to report third-quarter earnings Oct. 27.