Share price of Group 1 Automotive Inc. (GPI - Free Report) increased 5.4% to $62.32 on Jul 29, after the company reported second-quarter 2016 results. Group 1 Automotive reported a 9.1% year-over-year increase in earnings per share to $2.16 in the second quarter of 2016 that surpassed the Zacks Consensus Estimate by 6 cents. Adjusted net income dropped 1.1% to $47.4 million from $47.9 million in the year-ago quarter.
On reported basis, Group 1 Automotive recorded a net income of $46.6 million or $2.12 per share. In the prior-year quarter, the company recorded a net profit of $46.3 million or $1.91 per share.
Revenues increased 2.1% year over year to $2.78 billion but missed the Zacks Consensus Estimate of $2.89 billion. The top line benefited from strong performance in the U.K.
Revenues from new vehicle retail sales rose 0.4% to $1.5 billion despite a 2.5% decrease in unit sales to 43,644 vehicles. Revenues from retailed used vehicles improved 4.9% to $715.8 million on a 4.8% rise in unit sales to 32,951 vehicles. Revenues from used vehicle wholesale sales declined 5.2% to $96.3 million. Used vehicles’ wholesale volume fell 6.4% to 13,684 units.
Revenues from the Parts and Service business improved 6.2% to $322.1 million. The company’s Finance and Insurance business witnessed a 2.2% rise in revenues to $107.6 million.
Gross profit increased 4.7% to $410.1 million from $391.6 million in the year-ago quarter. Operating income dipped 0.7% to $97.4 million from $98 million in the second quarter of 2015.
Segment Details
Revenues in the U.S. business fell 3.5% to $2.2 billion. The segment recorded a 6% decrease in new vehicle sales to $1.2 billion and a 1.3% decline in total used vehicles’ sales to $637.3 million. Parts and Service revenue increased 2.4%, while Finance and Insurance revenues decreased 1.6%.
Revenues in the U.K. business augmented 51.8% to $467.8 million from $308.2 million in the year-ago quarter. Retail new vehicle sales surged 63.5% to $262 million and total used vehicle sales escalated 33.6% to $156.2 million. Parts and Service revenue increased 58.5%, while Finance and Insurance revenues advanced 66.1%.
Revenues from the Brazil business fell 18% to $107.3 million in the reported quarter. New vehicle retail sales declined 20.1% to $75.4 million, while total used vehicle sales fell 11.2% to $18.5 million. Parts and Service revenue went down 16.7%, while Finance and Insurance revenues improved 5.9%.
Financial Details
Group 1 Automotive’s cash and cash equivalents increased 91.5% to $25 million as of Jun 30, 2016, from $13 million as of Dec 31, 2015. Total debt amounted to $403.1 million as of Jun 30, 2016, compared with $372.3 million as of Dec 31, 2015.
Share Repurchases
During the second quarter of 2016, Group 1 Automotive repurchased 1,462,144 shares at an average price of $56.97 for $83.3 million. From Jul 1, 2016 to Jul 27, 2016, Group 1 Automotive repurchased an additional 244,205 shares at an average price of $50.61 for $12.4 million. As of Jul 27, 2016, the company had $22.4 million remaining under the prior share repurchase authorization.
Year to date, Group 1 Automotive has repurchased 2.3 million shares representing a 10% reduction from the previously announced share count as of Dec 31, 2015.
Acquisitions & Dispositions
In Apr 2016, Group 1 Automotive acquired two franchises in Brazil, including BMW and Toyota, and started operations at the Land Rover and Jaguar open point. These acquisitions will boost the company’s revenues by $20 million per annum.
In addition, Group 1 Automotive disposed of a Peugeot franchise in Brazil in Apr 2016. In Jun 2016, it completed the disposition of the last Peugeot store in its portfolio. These dealerships generated $15 million in annual revenues.
Zacks Rank
Currently, Group 1 Automotive carries a Zacks Rank #3 (Hold).
Some better-ranked automobile stocks include The Goodyear Tire & Rubber Company (GT - Free Report) , Johnson Controls Inc. (JCI - Free Report) and Gentex Corp. (GNTX - Free Report) , each carrying a Zacks Rank #2 (Buy).
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Share price of Group 1 Automotive Inc. (GPI - Free Report) increased 5.4% to $62.32 on Jul 29, after the company reported second-quarter 2016 results. Group 1 Automotive reported a 9.1% year-over-year increase in earnings per share to $2.16 in the second quarter of 2016 that surpassed the Zacks Consensus Estimate by 6 cents. Adjusted net income dropped 1.1% to $47.4 million from $47.9 million in the year-ago quarter.
On reported basis, Group 1 Automotive recorded a net income of $46.6 million or $2.12 per share. In the prior-year quarter, the company recorded a net profit of $46.3 million or $1.91 per share.
Revenues increased 2.1% year over year to $2.78 billion but missed the Zacks Consensus Estimate of $2.89 billion. The top line benefited from strong performance in the U.K.
Revenues from new vehicle retail sales rose 0.4% to $1.5 billion despite a 2.5% decrease in unit sales to 43,644 vehicles. Revenues from retailed used vehicles improved 4.9% to $715.8 million on a 4.8% rise in unit sales to 32,951 vehicles. Revenues from used vehicle wholesale sales declined 5.2% to $96.3 million. Used vehicles’ wholesale volume fell 6.4% to 13,684 units.
Revenues from the Parts and Service business improved 6.2% to $322.1 million. The company’s Finance and Insurance business witnessed a 2.2% rise in revenues to $107.6 million.
Gross profit increased 4.7% to $410.1 million from $391.6 million in the year-ago quarter. Operating income dipped 0.7% to $97.4 million from $98 million in the second quarter of 2015.
Segment Details
Revenues in the U.S. business fell 3.5% to $2.2 billion. The segment recorded a 6% decrease in new vehicle sales to $1.2 billion and a 1.3% decline in total used vehicles’ sales to $637.3 million. Parts and Service revenue increased 2.4%, while Finance and Insurance revenues decreased 1.6%.
Revenues in the U.K. business augmented 51.8% to $467.8 million from $308.2 million in the year-ago quarter. Retail new vehicle sales surged 63.5% to $262 million and total used vehicle sales escalated 33.6% to $156.2 million. Parts and Service revenue increased 58.5%, while Finance and Insurance revenues advanced 66.1%.
Revenues from the Brazil business fell 18% to $107.3 million in the reported quarter. New vehicle retail sales declined 20.1% to $75.4 million, while total used vehicle sales fell 11.2% to $18.5 million. Parts and Service revenue went down 16.7%, while Finance and Insurance revenues improved 5.9%.
Financial Details
Group 1 Automotive’s cash and cash equivalents increased 91.5% to $25 million as of Jun 30, 2016, from $13 million as of Dec 31, 2015. Total debt amounted to $403.1 million as of Jun 30, 2016, compared with $372.3 million as of Dec 31, 2015.
Share Repurchases
During the second quarter of 2016, Group 1 Automotive repurchased 1,462,144 shares at an average price of $56.97 for $83.3 million. From Jul 1, 2016 to Jul 27, 2016, Group 1 Automotive repurchased an additional 244,205 shares at an average price of $50.61 for $12.4 million. As of Jul 27, 2016, the company had $22.4 million remaining under the prior share repurchase authorization.
Year to date, Group 1 Automotive has repurchased 2.3 million shares representing a 10% reduction from the previously announced share count as of Dec 31, 2015.
Acquisitions & Dispositions
In Apr 2016, Group 1 Automotive acquired two franchises in Brazil, including BMW and Toyota, and started operations at the Land Rover and Jaguar open point. These acquisitions will boost the company’s revenues by $20 million per annum.
In addition, Group 1 Automotive disposed of a Peugeot franchise in Brazil in Apr 2016. In Jun 2016, it completed the disposition of the last Peugeot store in its portfolio. These dealerships generated $15 million in annual revenues.
Zacks Rank
Currently, Group 1 Automotive carries a Zacks Rank #3 (Hold).
Some better-ranked automobile stocks include The Goodyear Tire & Rubber Company (GT - Free Report) , Johnson Controls Inc. (JCI - Free Report) and Gentex Corp. (GNTX - Free Report) , each carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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