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Group 1 Automotive (GPI) Beats on Q1 Earnings & Revenues

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Group 1 Automotive Inc. (GPI - Free Report) reported earnings per share of $1.70 in first-quarter 2018, beating the Zacks Consensus Estimate of $1.56. The bottom line substantially improved from the prior-year quarter’s figure of $1.58. Results were aided by solid U.S. performance in March and gains from the new tax law.
 
The company recorded net income of $35.8 million compared with $33.9 million in the year-ago quarter. Revenues of $2.86 billion increased 13.5% year over year and surpassed the Zacks Consensus Estimate of $2.63 billion.

Revenues from new-vehicle retail sales increased 13.2% to $1.51 billion, owing to 7.6% rise in unit sales. The same from retailed used vehicles grew 18.1% to $780.6 million on 14.7% increase in unit sales. However, the metric from wholesale used-vehicle sales declined 0.1% to $104 million.

At the Parts and Service business, the top line improved 9.3% to $349.5 million. Also, the company’s Finance and Insurance business witnessed 16% gain in revenues to $112.3 million.

Gross profit was up 9.4% year over year to $419.8 million. Operating income declined 1.3% to $79 million.

Group 1 Automotive, Inc. Price, Consensus and EPS Surprise

Group 1 Automotive, Inc. Price, Consensus and EPS Surprise | Group 1 Automotive, Inc. Quote

Segment in Details

On a same-store basis, revenues in the U.S. business segment rose 4.2% to $2 billion. The segment recorded 4.9% growth in new-vehicle retail sales to $1.07 billion and an .3% fall in total used-vehicle sales to $34.5 million. Parts and Service revenues increased 3.4% while Finance and Insurance revenues rose 10.3%.

Revenues, on a same-store basis, increased 12.7% year over year to $504.2 million at the U.K. business segment. Retail new-vehicle sales improved 5.2% to $270.1 million and total used-vehicle sales rallied 25.5% to $182.3 million. Parts and Service revenues improved 13.1% while Finance and Insurance revenues rose 18.5%.

On a same-store basis, revenues in the Brazil business segment rose 15.8% year over year to $111 million in the reported quarter. New-vehicle retail sales gained 19.2% to $69.2 million while total used-vehicle sales rose 12.6% to $28 million. Parts and Service revenues increased 6.9% while Finance and Insurance revenues soared 4.6%.

Financial Details

Group 1 Automotive’s cash and cash equivalents increased to $33.1 million as of Mar 31, 2018, from $28.8 million as of Dec 31, 2017.

Share Repurchases

In first-quarter 2018, Group 1 Automotive repurchased 135,605 outstanding shares. As of Apr 26, 2018, the company had $40.4 million, remaining under the share repurchase authorization.

Zacks Rank & Key Picks

Group 1 Automotive carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same space include Fox Factory Holding Corp. (FOXF - Free Report) , Allison Transmission Holdings, Inc. (ALSN - Free Report) and Honda Motor Co., Ltd. (HMC - Free Report) , each carrying a Zacks Rank #2 (Buy).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fox Factory Holding has expected long-term growth rate of 10.5%. In the past year, shares of the company have returned 13.6%.

Allison Transmission has expected long-term growth rate of 10%. In a year, shares of the company have advanced 4.1%.

Honda has an expected long-term growth rate of 4.8%. In a year, shares of the company have returned 19.5%.

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