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Why Is Sonic Automotive (SAH) Down 10.2% Since its Last Earnings Report?
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It has been about a month since the last earnings report for Sonic Automotive, Inc. (SAH - Free Report) . Shares have lost about 10.2% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is SAH 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 drivers.
Sonic Automotive's Q4 Earnings, Revenues Beat, Up Y/Y
Sonic Automotive registered adjusted earnings per share of 84 cents in fourth-quarter 2017 compared with 66 cents in the year-ago quarter. Also, earnings surpassed the Zacks Consensus Estimate of 79 cents. Notably, during the quarter and full-year 2017, the company reported all-time record revenue and gross profit figures.
Total revenues in the reported quarter increased 4.3% to $2.67 billion. The figure also beat the Zacks Consensus Estimate of $2.61 billion.
During the quarter, revenues from total new vehicles increased 5.5% year over year to $1.49 billion. Revenues from used vehicles rose 5.3% to $686 million in the quarter. Wholesale vehicle revenues dropped 29.4% to $40.9 million. Revenues from parts, service and collision repair increased 1.3% to $355.1 million, and finance, insurance and other revenues grew 13.4 % to $100.2 million.
During the quarter, gross profit increased to $384.1 million in the reported quarter from $371.7 million a year ago. Selling, general and administrative expenses increased to $277.6 million from $267.1 million in the year-ago quarter. The company reported operating income of $77.2 million compared with $82.6 million in the year-ago quarter.
For 2017, the company reported adjusted earnings of $1.85 per share, lower than the 2016 figure of $2.01. In 2017, revenues were $9.87 billion, higher than the 2016 figure of $9.73 billion.
Business Update
During the quarter, the company’s EchoPark business grew nearly 167% or more than 2,800 units.
The company expects the EchoPark brand to sell in the range of 25,000 cars in 2018. This is more than double the sale in 2017.
2018 Outlook
Sonic Automotive expects 2018 earnings per share from continuing operations to be in the band of $2.21-$2.45.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower. In the past month, the consensus estimate has shifted downward by 24.2% due to these changes.
At this time, SAH has a nice Growth Score of B, though it is lagging a bit on the momentum front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for value and growth investors while momentum investors may want to look elsewhere.
Outlook
SAH has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Sonic Automotive (SAH) Down 10.2% Since its Last Earnings Report?
It has been about a month since the last earnings report for Sonic Automotive, Inc. (SAH - Free Report) . Shares have lost about 10.2% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is SAH 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 drivers.
Sonic Automotive's Q4 Earnings, Revenues Beat, Up Y/Y
Sonic Automotive registered adjusted earnings per share of 84 cents in fourth-quarter 2017 compared with 66 cents in the year-ago quarter. Also, earnings surpassed the Zacks Consensus Estimate of 79 cents. Notably, during the quarter and full-year 2017, the company reported all-time record revenue and gross profit figures.
Total revenues in the reported quarter increased 4.3% to $2.67 billion. The figure also beat the Zacks Consensus Estimate of $2.61 billion.
During the quarter, revenues from total new vehicles increased 5.5% year over year to $1.49 billion. Revenues from used vehicles rose 5.3% to $686 million in the quarter. Wholesale vehicle revenues dropped 29.4% to $40.9 million. Revenues from parts, service and collision repair increased 1.3% to $355.1 million, and finance, insurance and other revenues grew 13.4 % to $100.2 million.
During the quarter, gross profit increased to $384.1 million in the reported quarter from $371.7 million a year ago. Selling, general and administrative expenses increased to $277.6 million from $267.1 million in the year-ago quarter. The company reported operating income of $77.2 million compared with $82.6 million in the year-ago quarter.
For 2017, the company reported adjusted earnings of $1.85 per share, lower than the 2016 figure of $2.01. In 2017, revenues were $9.87 billion, higher than the 2016 figure of $9.73 billion.
Business Update
During the quarter, the company’s EchoPark business grew nearly 167% or more than 2,800 units.
The company expects the EchoPark brand to sell in the range of 25,000 cars in 2018. This is more than double the sale in 2017.
2018 Outlook
Sonic Automotive expects 2018 earnings per share from continuing operations to be in the band of $2.21-$2.45.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower. In the past month, the consensus estimate has shifted downward by 24.2% 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, SAH has a nice Growth Score of B, though it is lagging a bit on the momentum front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for value and growth investors while momentum investors may want to look elsewhere.
Outlook
SAH has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.