Group 1 Automotive (GPI - Free Report) announced that it is evaluating the extent of damage at seven out of its eight import and domestic dealerships in Oklahoma City, OK caused by the hail storm on May 29.
According to the assessment, some of the facilities and inventories consisting of new and used vehicles were damaged. The company has informed that it is insured but it needs to incur after tax charges related to deductibles in the range of $1.8 million to $2.3 million or 7 cents to 10 cents per share in the second quarter of 2012.
The affected dealerships of Group 1 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.
These seven dealerships accounted for 5.8% of new vehicles sales in 2011. These dealerships of Oklahoma City, Okla.consist of 10 franchises including General Motors Company’s (GM - Free Report) Buick, GMC and Chevrolet; Chrysler’s Chrysler brand, Dodge and Jeep; Nissan Motor Co. (NSANY - Free Report) ; Toyota Motor Corporation (TM - Free Report) ; and Honda Motor Co. (HMC - Free Report) and its luxury division Acura.
Group 1’s three other dealerships located in the Tulsa area and one in the Oklahoma City are in full operation and were not affected by the storm. The company plans to replace the damaged inventories as soon as possible together with its manufacturing partners. It will also source inventories form other stores.
Group 1 Automotive posted its first quarter 2012 earnings per share of 97 cents, surpassing the Zacks Consensus Estimate of 89 cents and the year-ago earnings of 64 cents. Profits went up 49.1% to $23.1 million compared with $15.4 million in the year-ago quarter.
The company’s revenues for the quarter came in at $1.66 billion, up 18.1% from $1.41 billion in the year-ago quarter. Revenues from new vehicles hiked16.3% to $912.6 million and used vehicles swelled 28.3% in the reported quarter.
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 31 automotive brands. It has 120 automotive dealerships, 152 franchises and 28 collision centers in U.S. and UK. The company offers new and used cars, light trucks and is also engaged in sales financing activities.
In addition, the company provides insurance contracts, maintenance and repair services along with vehicle parts to its customers. It competes with AutoNation Inc. (AN - Free Report) and Penske Automotive Group Inc. (PAG - Free Report) . Currently, the company retains a Zacks #2 Rank, which implies a Buy rating for the short term.