Asbury Earnings: Stop Sales and Helene Hurt Third Quarter, and Fourth Quarter Will Suffer Too

Asbury Automotive’s third-quarter adjusted diluted earnings per share of $6.35 fell short of the $6.58 LSEG consensus and declined 21.8% year over year. Still, we think the company had a solid quarter despite many challenges, particularly from BMW, Toyota, and Lexus stop sales on certain desirable light-truck models, costing about 1,200 new-vehicle units sold, and major disruption from Hurricane Helene. We see no reason to change our fair value estimate. Management estimated that adjusted EPS would have been $6.74-$6.78 absent these challenges. Stop sales bring an opportunity for future service work, but that is not likely to happen until the fourth quarter and during 2025. Toyota has a fix for the Grand Highlander and Lexus TX, but service will not all be done in 2024.