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Sonic Automotive (SAH) Q4 Earnings, Revenues Top Estimates
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Sonic Automotive Inc. (SAH - Free Report) recorded adjusted earnings per share of 66 cents in the fourth quarter of 2016, up from 61 cents recorded in the year-ago quarter. Earnings also surpassed the Zacks Consensus Estimate of 62 cents.
Adjusted net income was $29.8 million compared with $30.9 million in the fourth quarter of 2015. Earnings on reported basis were $38.0 million or 84 cents per share and $31.5 million or 63 cents per share.
Total revenue in the reported quarter increased 3.5% to $2.56 billion. The figure also surpassed the Zacks Consensus Estimate of $2.50 billion.
Revenues from new vehicles inched up 0.6% to $1.41 billion, while that from used vehicles increased 7.3% to $651.6 million in the quarter. Wholesale vehicle revenues surged 67.5% to $57.9 million. Revenues from parts, service and collision repair increased 1.6% to $350.7 million, while finance, insurance and other revenues grew 5.4% to $88.3 million.
Gross profit increased to $371.7 million in the reported quarter from $363.8 million a year ago. Selling, general and administrative expenses decreased to $267.1 million from $275 million in the year-ago quarter. The company reported adjusted operating income of $84.5 million compared with $71 million in the fourth quarter of 2015.
Sonic Automotive, Inc. Price, Consensus and EPS Surprise
Adjusted earnings for 2016 increased 2% to $2.01 per share from $1.97 in 2015. The figure also surpassed the Zacks Consensus Estimate of $1.97.
Revenues for 2016 inched up 1.1% to $9.73 billion, above the Zacks Consensus Estimate of $9.70 billion.
Dividend Update
The board of directors at Sonic Automotive announced a quarterly dividend of 5 cents per share. The dividend will be paid on Apr 14, 2017, to shareholders on record as of Mar 15, 2017.
Business Update
EchoPark recorded an improvement in performance from the operational and financial perspective.
The company plans to open a store in Colorado Springs in the second quarter of 2017. With this, the company will have six stores in Colorado. In addition, Sonic Automotive plans to expand in the Texas, mainly in the San Antonio market. It will be opening at least three stores this year.
2017 Outlook
Sonic Automotive expects new vehicle industry volumes in the range of 17 to 17.5 million units in 2017. The company expects earnings per share in 2017 in the band of $2.00 to $2.10. Earnings include the projected EchoPark results. However, the company expects to incur a loss of 23 cents to 27 cents in 2017 due to EchoPark.
Price Performance
Sonic Automotive has outperformed the Zacks categorized Retail/Wholesale Auto/Truck industry over the last three months. During this period, the company’s share price increased 22%, while the industry gained 8.7%. The rally in the stock price was driven by various initiatives undertaken by the company such as expanding its network of stores and capital deployment strategy.
Zacks Rank & Key Picks
Sonic Automotive currently carries a Zacks Rank #4 (Sell).
For the current year, Honda, Fox Factory and General Motors expect earnings growth rate at around 27%, 16.6% and 9.4%, respectively.
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Sonic Automotive (SAH) Q4 Earnings, Revenues Top Estimates
Sonic Automotive Inc. (SAH - Free Report) recorded adjusted earnings per share of 66 cents in the fourth quarter of 2016, up from 61 cents recorded in the year-ago quarter. Earnings also surpassed the Zacks Consensus Estimate of 62 cents.
Adjusted net income was $29.8 million compared with $30.9 million in the fourth quarter of 2015. Earnings on reported basis were $38.0 million or 84 cents per share and $31.5 million or 63 cents per share.
Total revenue in the reported quarter increased 3.5% to $2.56 billion. The figure also surpassed the Zacks Consensus Estimate of $2.50 billion.
Revenues from new vehicles inched up 0.6% to $1.41 billion, while that from used vehicles increased 7.3% to $651.6 million in the quarter. Wholesale vehicle revenues surged 67.5% to $57.9 million. Revenues from parts, service and collision repair increased 1.6% to $350.7 million, while finance, insurance and other revenues grew 5.4% to $88.3 million.
Gross profit increased to $371.7 million in the reported quarter from $363.8 million a year ago. Selling, general and administrative expenses decreased to $267.1 million from $275 million in the year-ago quarter. The company reported adjusted operating income of $84.5 million compared with $71 million in the fourth quarter of 2015.
Sonic Automotive, Inc. Price, Consensus and EPS Surprise
Sonic Automotive, Inc. Price, Consensus and EPS Surprise | Sonic Automotive, Inc. Quote
2016 Performance
Adjusted earnings for 2016 increased 2% to $2.01 per share from $1.97 in 2015. The figure also surpassed the Zacks Consensus Estimate of $1.97.
Revenues for 2016 inched up 1.1% to $9.73 billion, above the Zacks Consensus Estimate of $9.70 billion.
Dividend Update
The board of directors at Sonic Automotive announced a quarterly dividend of 5 cents per share. The dividend will be paid on Apr 14, 2017, to shareholders on record as of Mar 15, 2017.
Business Update
EchoPark recorded an improvement in performance from the operational and financial perspective.
The company plans to open a store in Colorado Springs in the second quarter of 2017. With this, the company will have six stores in Colorado. In addition, Sonic Automotive plans to expand in the Texas, mainly in the San Antonio market. It will be opening at least three stores this year.
2017 Outlook
Sonic Automotive expects new vehicle industry volumes in the range of 17 to 17.5 million units in 2017. The company expects earnings per share in 2017 in the band of $2.00 to $2.10. Earnings include the projected EchoPark results. However, the company expects to incur a loss of 23 cents to 27 cents in 2017 due to EchoPark.
Price Performance
Sonic Automotive has outperformed the Zacks categorized Retail/Wholesale Auto/Truck industry over the last three months. During this period, the company’s share price increased 22%, while the industry gained 8.7%. The rally in the stock price was driven by various initiatives undertaken by the company such as expanding its network of stores and capital deployment strategy.
Zacks Rank & Key Picks
Sonic Automotive currently carries a Zacks Rank #4 (Sell).
Better-ranked companies in the auto space include Honda Motor Co., Ltd. (HMC - Free Report) , Fox Factory Holding Corp (FOXF - Free Report) and General Motors Company (GM - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For the current year, Honda, Fox Factory and General Motors expect earnings growth rate at around 27%, 16.6% and 9.4%, respectively.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>