Group 1 expects to report 68-72 cents per share

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NEW YORK -Auto dealer Group 1 Automotive Inc. expects to turn in better third-quarter results than Wall Street analysts had forecast, thanks partly to Cash for Clunkers.

The company said Tuesday it expects to report earnings between 68 cents and 72 cents per share.

That excludes a tax adjustment gain estimated at 7 cents per share, a debt-redemption gain of 2 cents per share and real estate impairment charges of 2 cents per share.

The mean forecast of analysts was for earnings of 51 cents per share, according to a survey by Thomson Reuters. Analysts usually exclude special items from their calculations.

Group 1 is scheduled to report results Oct. 27.

CEO Earl J. Hesterberg said the company was on target with actions to cut spending at least $120 million this year.

The cost savings "and substantial incremental new vehicle sales under the government's CARS program, produced very strong quarterly results." CARS stands for car allowance rebate system, another term for the program that subsidized certain vehicle purchases over the summer.

Group 1 sells new and used vehicles and performs repair services through a network of dealerships and shops.

The shares rose 16 cents to close at $29.78 in regular trading, then after the announcement they gained $1.30, or 4.4 percent, to $31.08 in extended trading.

2009-10-13 16:40:37