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Sonic Automotive (SAH) Down 19% Since Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Sonic Automotive, Inc. (SAH - Free Report) . Shares have lost about 19% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Sonic Automotive Q4 Earnings, Revenues Top Estimates
Sonic Automotive recorded adjusted earnings per share of $0.66 in the fourth quarter of 2016, up from $0.61 recorded in the year-ago quarter. Earnings also surpassed the Zacks Consensus Estimate of $0.62.
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 $0.84 per share and $31.5 million or $0.63.
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.
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 $0.05 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 $0.23 to $0.27 in 2017 due to EchoPark.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one downward revision for the current quarter. In the past month, the consensus estimate also shifted downward by 21.5% due to these changes.
At this time, Sonic Automotive's stock has a poor Growth Score of 'F', however its Momentum is doing a bit better with a 'D'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The stock is suitable solely for value based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. It's no surprise that the stock has a Zacks Rank #4 (Sell). We are looking for a below average return from the stock in the next few months.
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Sonic Automotive (SAH) Down 19% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Sonic Automotive, Inc. (SAH - Free Report) . Shares have lost about 19% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Sonic Automotive Q4 Earnings, Revenues Top Estimates
Sonic Automotive recorded adjusted earnings per share of $0.66 in the fourth quarter of 2016, up from $0.61 recorded in the year-ago quarter. Earnings also surpassed the Zacks Consensus Estimate of $0.62.
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 $0.84 per share and $31.5 million or $0.63.
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.
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 $0.05 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 $0.23 to $0.27 in 2017 due to EchoPark.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one downward revision for the current quarter. In the past month, the consensus estimate also shifted downward by 21.5% due to these changes.
Sonic Automotive, Inc. Price and Consensus
Sonic Automotive, Inc. Price and Consensus | Sonic Automotive, Inc. Quote
VGM Scores
At this time, Sonic Automotive's stock has a poor Growth Score of 'F', however its Momentum is doing a bit better with a 'D'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The stock is suitable solely for value based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. It's no surprise that the stock has a Zacks Rank #4 (Sell). We are looking for a below average return from the stock in the next few months.