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Auto dealer software company slashes '08 outlook

Monday, August 11, 2008

LAKE SUCCESS, N.Y. —  Automotive dealer software manufacturer DealerTrack Holdings Inc. slashed its full-year earnings and revenue projections Monday, saying a challenging credit environment and slowdown in new car sales would impede performance.

Its shares tumbled 16 percent in after-hours trading, shedding $2.54 to $13.25 after closing the regular session down 21 cents at $15.79.

The Lake Success-based company said it expects to earn between $9.4 million and $12.8 million in 2008. That would be earnings per share of between 22 cents and 30 cents.

The company previously expected to earn between $21 million and $22.6 million, or 48 cents to 52 cents per share.

DealerTrack executives said they expected revenue of $246 million to $253 million _ down from earlier estimates of $268 million to 272 million.

Analysts surveyed by Thomson Financial expect the company to earn 98 cents per share on revenue of $260 million for the year.

"We continue to expand our product offerings and to invest in our existing products," DealerTrack Chairman and Chief Executive Mark O'Neil said in a statement. "We believe we can continue to grow through this economic downturn. It would be shortsighted of us to stop development of new projects; instead, we remain focused on growing DealerTrack by providing our customers with the solutions they need to be more efficient."

The company said its new outlook doesn't assume a recovery in the nation's auto lending environment this year.

Separately Monday, DealerTrack said its second-quarter profit fell 51 percent to $3.06 million, or 7 cents per share, in the quarter ending June 30. That's down from $6.28 million, or 15 cents a share, during the same period last year.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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