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Sonic Automotive's Q2 Results to be Impacted by Margin Woes
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Sonic Automotive, Inc. (SAH - Free Report) is slated to report second-quarter 2018 results on Jul 27. The company anticipates gross margin pressure in key brands to adversely impact its performance in the soon-to-be-reported quarter. According to the company sources, at its BMW and Honda dealerships, new vehicle gross profit per unit was considerably lower during the second quarter. This low margin can be attributed to the lower manufacturer-to-dealer incentives on certain models. This low margin pressure is likely to continue in the third quarter too. However, this scenario is anticipated to reverse in the fourth quarter, with new model releases from BMW and support from its manufacturing partners.
Sonic Automotive is one of the leading automotive retailers in the United States. Apart from selling new and used cars as well as light trucks, the company offers warranties, service contracts, vehicle financing and insurance.
However, due to these headwinds, the company now expects diluted earnings per share from continuing operations for second-quarter 2018 to be in the range of $0.37-$0.41 and on an adjusted basis to be in the range of $0.32-$0.36. For 2018, the company expects diluted earnings per share from continuing operations to be within the range $1.65 and $1.75 and on an adjusted basis to be between $1.90 and $2.00.
In the past year, shares of Sonic Automotive have outperformed the industry it belongs to. Over this time frame, shares of the company have risen 7.4%, whereas the industry recorded growth of 12.6%.
Sonic Automotive currently has a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the auto space are American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) , Magna International Inc. (MGA - Free Report) and Fox Factory Holding Corp. (FOXF - Free Report) . While American Axle & Manufacturing sports a Zacks Rank #1 (Strong Buy), both Magna and Fox Factory Holding carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Axle & Manufacturing has an expected long-term growth rate of 8.1%. Over the past three months, shares of the company have moved up 7.6%.
Magna has an expected long-term growth rate of 8.5%. Over the past year, shares of the company have gained 27.1%.
Fox Factory has an expected long-term growth rate of 12.5%. Shares of the company have risen 41.7% over the past year.
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Sonic Automotive's Q2 Results to be Impacted by Margin Woes
Sonic Automotive, Inc. (SAH - Free Report) is slated to report second-quarter 2018 results on Jul 27. The company anticipates gross margin pressure in key brands to adversely impact its performance in the soon-to-be-reported quarter. According to the company sources, at its BMW and Honda dealerships, new vehicle gross profit per unit was considerably lower during the second quarter. This low margin can be attributed to the lower manufacturer-to-dealer incentives on certain models. This low margin pressure is likely to continue in the third quarter too. However, this scenario is anticipated to reverse in the fourth quarter, with new model releases from BMW and support from its manufacturing partners.
Sonic Automotive is one of the leading automotive retailers in the United States. Apart from selling new and used cars as well as light trucks, the company offers warranties, service contracts, vehicle financing and insurance.
However, due to these headwinds, the company now expects diluted earnings per share from continuing operations for second-quarter 2018 to be in the range of $0.37-$0.41 and on an adjusted basis to be in the range of $0.32-$0.36. For 2018, the company expects diluted earnings per share from continuing operations to be within the range $1.65 and $1.75 and on an adjusted basis to be between $1.90 and $2.00.
In the past year, shares of Sonic Automotive have outperformed the industry it belongs to. Over this time frame, shares of the company have risen 7.4%, whereas the industry recorded growth of 12.6%.
Sonic Automotive currently has a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the auto space are American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) , Magna International Inc. (MGA - Free Report) and Fox Factory Holding Corp. (FOXF - Free Report) . While American Axle & Manufacturing sports a Zacks Rank #1 (Strong Buy), both Magna and Fox Factory Holding carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Axle & Manufacturing has an expected long-term growth rate of 8.1%. Over the past three months, shares of the company have moved up 7.6%.
Magna has an expected long-term growth rate of 8.5%. Over the past year, shares of the company have gained 27.1%.
Fox Factory has an expected long-term growth rate of 12.5%. Shares of the company have risen 41.7% over the past year.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana
.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>