Top Performer for Mon: Group 1 Automotive (GPI)

Group 1 Automotive, Inc. (GPI - Snapshot Report) has made the Zacks #1 Rank Top Performers List for Monday with a gain of more than 8%. Volume is at 478,000 shares, which is below the daily average of 833,000.

Earnings estimates for GPI have gained sharply over the past 2 months. Furthermore, the company announced a solid third-quarter report in late October that included a positive EPS surprise.

Group 1 Automotive is a leading operator and consolidator in the highly fragmented automotive retailing industry. The company owns dealership franchises from where it sells new and used cars and light trucks, while also providing maintenance and repair services, selling replacement parts and arranging vehicle financing, insurance and service contracts.

GPI is a representative of the retail/wholesale auto/truck industry on today's Zacks #1 Rank List, as are CarMax, Inc. (KMX - Analyst Report) and Penske Automotive Group, Inc. (PAG - Analyst Report). (In total, there are 224 stocks on today's List.)

Earnings Estimates for Group 1 Automotive

The Zacks Consensus Estimate for this year is at $1.75 per share, marking a more than 24% gain over the last 2 months from $1.41. There has also been a slight, 2-cent gain in this guidance over the last 30 days.

GPI revised its 2009 earnings guidance to between $1.66 and $1.76 during its third quarter report.

Meanwhile, the Zacks Consensus Estimate for next year is $2.36, which suggests that Group 1 Automotive could put together sharp year-over-year profit growth of 35%. This guidance has gained more than 23% in the past 2 months from $1.91, and has also advanced from $2.29 in 30 days.

Third Quarter

In late October, Group 1 Automotive announced adjusted EPS from continuing operations of 71 cents for the third quarter. The result inched past the Zacks Consensus Estimate of 70 cents. It was the fourth straight quarter of better-than-expected results. In fact, the company has amassed an average surprise of more than 200% in those 4 quarters (mostly because of a 700% beat in last year's fourth quarter).

Total revenues declined to approximately $1.25 billion from $1.43 billion. The company sold 25,057 new vehicles during the quarter, and 4,874 were part of the CARS program.

"Our strong third-quarter performance validates that Group 1's business model is flexible enough to react quickly to changes in market conditions," said President and CEO of Group 1 Automotive Earl J. Hesterberg. "The cost reductions and inventory controls we implemented in the first half of the year have positioned Group 1 to benefit from any improvement in new vehicle volumes, as demonstrated this quarter."

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