BUSINESS

AutoCanada stock plunges after sobering outlook for 2015 amid lower oil prices

03/20/2015 08:10 EDT | Updated 05/20/2015 05:59 EDT
EDMONTON - Shares in AutoCanada Inc. (TSX:ACQ) plunged more than 20 per cent Friday after the auto dealership company issued a sobering outlook for 2015 due to the troubles in Canada's energy industry caused by low oil prices.

The Edmonton-based company's stock closed down $8.99 at $33.75 on the Toronto Stock Exchange after going as low as $32.78.

AutoCanada announced after markets closed Thursday that 2014 was a good year until December, but that this year will be challenging because of the job losses in the energy sector.

It said sales and margins in the first two months of 2015 have been significantly lower than forecasts.

The company also said unusually heavy snow has also been a factor in the Atlantic provinces.

"The company is aggressively taking the necessary steps to address these challenges at the individual dealership level," the company said it an earnings report issued after markets closed Thursday.

AutoCanada operates 48 auto dealerships in eight provinces.

For the fourth quarter, the company earned a profit of $14.9 million or 59 cents per diluted share, up from $9.6 million or 44 cents per diluted share. Revenue nearly doubled to $653.5 million from $319.7 million a year ago.

For the full year ended Dec. 31, AutoCanada's revenue was up 57.2 per cent or $805.7 million to $2.2 billion from $1.4 billion, while its net income rose to $53.1 million or $2.30 per diluted share from $38.2 million or $1.83 per diluted share in 2013.

Note to readers: This is a corrected story. An earlier version incorrectly stated AutoCanada's annual revenue for 2014.