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Group 1 Automotive (GPI) Beats on Q4 Earnings, Revenues Lag
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Share price of Group 1 Automotive Inc. (GPI - Free Report) dipped 0.5% to $78.79 on Feb 2, after the company reported weak fourth-quarter performance in the U.S. and Brazil. Group 1 Automotive recorded a 15% year-over-year increase in adjusted earnings per share to $1.74 in the fourth-quarter 2016 that surpassed the Zacks Consensus Estimate of $1.69. Adjusted net income increased 4.4% to $37.3 million from $35.7 million in the year-ago quarter.
On reported basis, Group 1 Automotive recorded a net income of $30.8 million or $1.44 per share. In the prior-year quarter, the company recorded a net loss of $33.4 million or $1.41 per share.
Revenues remained constant year over year at $2.67 billion but missed the Zacks Consensus Estimate of $2.72 billion. The top line benefited from strong performance in U.K.
Revenues from new vehicle retail sales fell 1.7% to $1.51 billion due to a 3.3% decrease in unit sales to 42,031 vehicles. Revenues from retailed used vehicles inched up 0.8% to $651.1 million on a 0.5% rise in unit sales to 30,377 vehicles. Revenues from used vehicle wholesale sales increased 5% to $99.8 million. Used vehicles’ wholesale volume rose 3.9% to 14,262 units.
From the Parts and Service business, revenues improved 4.6% to $311 million. The company’s Finance and Insurance business witnessed a 2.9% rise in revenues to $104.2 million.
Gross profit increased 2.4% to $389.2 million from $380.1 million in the year-ago quarter. Operating income surged to $76.9 million from $2.9 million due to significantly high asset impairments in the fourth quarter of 2015.
Group 1 Automotive, Inc. Price, Consensus and EPS Surprise
Group 1 Automotive recorded an 8% year-over-year increase in adjusted earnings per share to a record $7.42 in 2016 that surpassed the Zacks Consensus Estimate of $7.39.
Revenues improved 2.4% year over year to a record $10.89 billion but missed the Zacks Consensus Estimate of $10.94 billion.
Segment Details
Revenues in the U.S. business fell 4.1% to $2.2 billion. The segment recorded a 6.8% decrease in new vehicle retail sales to $1.21 billion and a 1.9% decline in total used vehicles’ retail sales to $603.9 million. Parts and Service revenue increased 1.9%, while Finance and Insurance revenues inched up 0.5%.
Revenues in the U.K. business augmented 35.9% to $387.5 million from $285.1 million in the year-ago quarter. Retail new vehicle sales surged 49.1% to $222.8 million and total used vehicle sales grew 17.8% to $122.2 million. Parts and Service revenue increased 31.7%, while Finance and Insurance revenues advanced 38.9%.
Revenues from the Brazilbusiness fell 6.4% to $115.2 million in the reported quarter. New vehicle retail sales declined 12.9% to $76.8 million, while total used vehicle sales increased 13.8% to $24.9 million. Parts and Service revenues were up 6.1%, while Finance and Insurance revenues fell 8.7%.
Financial Details
Group 1 Automotive’s cash and cash equivalents increased to $21 million as of Dec 31 from the year-ago figure of $13 million. Total debt amounted to $1.29 billion as of Dec 31 compared with the year-ago figure of $1.25 billion.
Share Repurchases
During 2016, Group 1 Automotive repurchased 2.28 million shares at an average price of $55.90 for $127.6 million. As of Feb 1, 2017, the company had $22.4 million remaining under the prior share repurchase authorization.
Acquisitions & Dispositions
During 2016, Group 1 Automotive acquired 21 franchises, which are expected to generate $660 million in annual revenues. The company also disposed off 10 franchises that generated approximately $240 million in trailing 12-month revenues.
Later, in Jan 2017, Group 1 Automotive acquired a BMW motorcycle franchise in Paraná, Brazil. The franchise is expected to generate approximately $5 million in annual revenues. Additionally, in Feb 2017, the company disposed off its remaining two Nissan stores in Brazil, which generated approximately $25 million in trailing-twelve-month revenues.
Price Performance
Group 1 Automotive has outperformed the Zacks categorized Automotive - Retail and Whole Sales industry over the last three months. The company’s shares gained 27.6% over this period, compared with a 20.2% increase recorded by the industry. The company gained from regular acquisition of dealerships and franchises to expand business and capital deployment to boost shareholders value.
Zacks Rank & Key Picks
Currently, Group 1 Automotive carries a Zacks Rank #3 (Hold).
Some better-ranked automobile stocks include Honda Motor Co., Ltd. (HMC - Free Report) , Penske Automotive Group, Inc. (PAG - Free Report) and Fox Factory Holding Corp (FOXF - Free Report) .
Penske Automotive has expected long-term earnings per share growth rate of 8.2%. It carries a Zacks Rank #2 (Buy).
Fox Factory holds a Zacks Rank #2. The company has expected earnings growth rate of 16.6% over the long term.
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Group 1 Automotive (GPI) Beats on Q4 Earnings, Revenues Lag
Share price of Group 1 Automotive Inc. (GPI - Free Report) dipped 0.5% to $78.79 on Feb 2, after the company reported weak fourth-quarter performance in the U.S. and Brazil. Group 1 Automotive recorded a 15% year-over-year increase in adjusted earnings per share to $1.74 in the fourth-quarter 2016 that surpassed the Zacks Consensus Estimate of $1.69. Adjusted net income increased 4.4% to $37.3 million from $35.7 million in the year-ago quarter.
On reported basis, Group 1 Automotive recorded a net income of $30.8 million or $1.44 per share. In the prior-year quarter, the company recorded a net loss of $33.4 million or $1.41 per share.
Revenues remained constant year over year at $2.67 billion but missed the Zacks Consensus Estimate of $2.72 billion. The top line benefited from strong performance in U.K.
Revenues from new vehicle retail sales fell 1.7% to $1.51 billion due to a 3.3% decrease in unit sales to 42,031 vehicles. Revenues from retailed used vehicles inched up 0.8% to $651.1 million on a 0.5% rise in unit sales to 30,377 vehicles. Revenues from used vehicle wholesale sales increased 5% to $99.8 million. Used vehicles’ wholesale volume rose 3.9% to 14,262 units.
From the Parts and Service business, revenues improved 4.6% to $311 million. The company’s Finance and Insurance business witnessed a 2.9% rise in revenues to $104.2 million.
Gross profit increased 2.4% to $389.2 million from $380.1 million in the year-ago quarter. Operating income surged to $76.9 million from $2.9 million due to significantly high asset impairments in the fourth quarter of 2015.
Group 1 Automotive, Inc. Price, Consensus and EPS Surprise
Group 1 Automotive, Inc. Price, Consensus and EPS Surprise | Group 1 Automotive, Inc. Quote
2016 Results
Group 1 Automotive recorded an 8% year-over-year increase in adjusted earnings per share to a record $7.42 in 2016 that surpassed the Zacks Consensus Estimate of $7.39.
Revenues improved 2.4% year over year to a record $10.89 billion but missed the Zacks Consensus Estimate of $10.94 billion.
Segment Details
Revenues in the U.S. business fell 4.1% to $2.2 billion. The segment recorded a 6.8% decrease in new vehicle retail sales to $1.21 billion and a 1.9% decline in total used vehicles’ retail sales to $603.9 million. Parts and Service revenue increased 1.9%, while Finance and Insurance revenues inched up 0.5%.
Revenues in the U.K. business augmented 35.9% to $387.5 million from $285.1 million in the year-ago quarter. Retail new vehicle sales surged 49.1% to $222.8 million and total used vehicle sales grew 17.8% to $122.2 million. Parts and Service revenue increased 31.7%, while Finance and Insurance revenues advanced 38.9%.
Revenues from the Brazil business fell 6.4% to $115.2 million in the reported quarter. New vehicle retail sales declined 12.9% to $76.8 million, while total used vehicle sales increased 13.8% to $24.9 million. Parts and Service revenues were up 6.1%, while Finance and Insurance revenues fell 8.7%.
Financial Details
Group 1 Automotive’s cash and cash equivalents increased to $21 million as of Dec 31 from the year-ago figure of $13 million. Total debt amounted to $1.29 billion as of Dec 31 compared with the year-ago figure of $1.25 billion.
Share Repurchases
During 2016, Group 1 Automotive repurchased 2.28 million shares at an average price of $55.90 for $127.6 million. As of Feb 1, 2017, the company had $22.4 million remaining under the prior share repurchase authorization.
Acquisitions & Dispositions
During 2016, Group 1 Automotive acquired 21 franchises, which are expected to generate $660 million in annual revenues. The company also disposed off 10 franchises that generated approximately $240 million in trailing 12-month revenues.
Later, in Jan 2017, Group 1 Automotive acquired a BMW motorcycle franchise in Paraná, Brazil. The franchise is expected to generate approximately $5 million in annual revenues. Additionally, in Feb 2017, the company disposed off its remaining two Nissan stores in Brazil, which generated approximately $25 million in trailing-twelve-month revenues.
Price Performance
Group 1 Automotive has outperformed the Zacks categorized Automotive - Retail and Whole Sales industry over the last three months. The company’s shares gained 27.6% over this period, compared with a 20.2% increase recorded by the industry. The company gained from regular acquisition of dealerships and franchises to expand business and capital deployment to boost shareholders value.
Zacks Rank & Key Picks
Currently, Group 1 Automotive carries a Zacks Rank #3 (Hold).
Some better-ranked automobile stocks include Honda Motor Co., Ltd. (HMC - Free Report) , Penske Automotive Group, Inc. (PAG - Free Report) and Fox Factory Holding Corp (FOXF - Free Report) .
Honda carries a Zacks Rank #1 (Strong Buy) and has long-term growth rate of 27%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Penske Automotive has expected long-term earnings per share growth rate of 8.2%. It carries a Zacks Rank #2 (Buy).
Fox Factory holds a Zacks Rank #2. The company has expected earnings growth rate of 16.6% over the long term.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>