Group 1 Automotive, Inc. (GPI - Free Report) reported adjusted earnings per share of $1.66 in first-quarter 2020, beating the Zacks Consensus Estimate of $1.05. Higher-than-expected revenues from new and used vehicles led to the outperformance. The bottom line, however, declined from the prior-year quarter’s $2.06 per share. Weak contribution across U.S., U.K. and Brazil segments acted as a dampener.
Revenues of $2.69 billion fell 4.2% year over year. The top line, however, beat the Zacks Consensus Estimate of $2.35 billion.
Q4 Highlights
New-vehicle retail sales declined 5.1% from the prior-year quarter to $1.34 billion. However, the figure surpassed the Zacks Consensus Estimate of $1.18 billion. Used-vehicle sales fell 5% from the year-ago quarter to $865.6 million. However, the metric beat the consensus mark of $775 million. For the Parts and Service business, the top line improved 0.4% from a year ago to $370.6 million. However, revenues from the Finance and Insurance business were down 0.8% from the prior-year period to $112.5 million.
Segments in Detail
Revenues in the U.S. business segment fell 2.7% year over year to $2 billion. The segment’s gross profit also dropped 1.7% year over year to $340.9 million. In the reported quarter, retail new-vehicle, used-vehicle, and wholesale used-vehicle units sold were 24,495, 27,668 and 7,027, respectively.
Revenues declined 8% year over year to $590.7 million for the U.K. business segment. Gross profit was $64.8 million, marking a 9.9% decrease from the first quarter of 2019. In the quarter under review, retail new-vehicle, used-vehicle, and wholesale used-vehicle units sold were 8,894, 8,024 and 4,584, respectively.
Revenues for the Brazil business segment slid 10.5% year over year to $92.5 million. The segment’s gross profit also declined 15.2% year over year to $10.7 million. In the reported quarter, retail new-vehicle, used-vehicle, and wholesale used-vehicle units sold were 1,971, 1,098 and 475, respectively.
Financial Details
Group 1’s cash and cash equivalents fell to $19.2 million as of Mar 31, 2020 from $23.8 million on Dec 31, 2019. Long-term debt was $1,137.7 million as of Mar 31, 2020, marking a decrease from $1,432.1 million recorded on Dec 31, 2019. Long-term debt to capital stands at 49.2%.
Actions Amid COVID-19
Group 1 has implemented a number of actions to boost its cash position and preserve financial flexibility in the face of rising global market uncertainty due to coronavirus-induced crisis. The company has furloughed 4,800, 2,800 and 450 employees in the United States, United Kingdom and Brazil, respectively. Moreover, Group 1 has reduced corporate compensation, with cuts as much as 50% for the firm’s CEO. The company is also putting efforts to trim U.S. marketing costs by more than 75%. To preserve liquidity, the firm has suspended payouts and scrapped the buyback program.
Looking Forward
Amid coronavirus-led uncertainty, Group 1 has refrained from providing any guidance. Depressed demand for vehicles amid weak consumer confidence is expected to reflect on its second-quarter results.The firm expects the service business to recover more quickly than vehicle sales.
Zacks Rank & Stocks to Consider
Group 1 currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the auto space include Modine Manufacturing Company (MOD - Free Report) , Unique Fabricating Inc. and Veoneer Inc. , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Zacks Names "Single Best Pick to Double"
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Group 1 Automotive, Inc. (GPI - Free Report) reported adjusted earnings per share of $1.66 in first-quarter 2020, beating the Zacks Consensus Estimate of $1.05. Higher-than-expected revenues from new and used vehicles led to the outperformance. The bottom line, however, declined from the prior-year quarter’s $2.06 per share. Weak contribution across U.S., U.K. and Brazil segments acted as a dampener.
Revenues of $2.69 billion fell 4.2% year over year. The top line, however, beat the Zacks Consensus Estimate of $2.35 billion.
Q4 Highlights
New-vehicle retail sales declined 5.1% from the prior-year quarter to $1.34 billion. However, the figure surpassed the Zacks Consensus Estimate of $1.18 billion. Used-vehicle sales fell 5% from the year-ago quarter to $865.6 million. However, the metric beat the consensus mark of $775 million. For the Parts and Service business, the top line improved 0.4% from a year ago to $370.6 million. However, revenues from the Finance and Insurance business were down 0.8% from the prior-year period to $112.5 million.
Segments in Detail
Revenues in the U.S. business segment fell 2.7% year over year to $2 billion. The segment’s gross profit also dropped 1.7% year over year to $340.9 million. In the reported quarter, retail new-vehicle, used-vehicle, and wholesale used-vehicle units sold were 24,495, 27,668 and 7,027, respectively.
Revenues declined 8% year over year to $590.7 million for the U.K. business segment. Gross profit was $64.8 million, marking a 9.9% decrease from the first quarter of 2019. In the quarter under review, retail new-vehicle, used-vehicle, and wholesale used-vehicle units sold were 8,894, 8,024 and 4,584, respectively.
Revenues for the Brazil business segment slid 10.5% year over year to $92.5 million. The segment’s gross profit also declined 15.2% year over year to $10.7 million. In the reported quarter, retail new-vehicle, used-vehicle, and wholesale used-vehicle units sold were 1,971, 1,098 and 475, respectively.
Financial Details
Group 1’s cash and cash equivalents fell to $19.2 million as of Mar 31, 2020 from $23.8 million on Dec 31, 2019. Long-term debt was $1,137.7 million as of Mar 31, 2020, marking a decrease from $1,432.1 million recorded on Dec 31, 2019. Long-term debt to capital stands at 49.2%.
Actions Amid COVID-19
Group 1 has implemented a number of actions to boost its cash position and preserve financial flexibility in the face of rising global market uncertainty due to coronavirus-induced crisis. The company has furloughed 4,800, 2,800 and 450 employees in the United States, United Kingdom and Brazil, respectively. Moreover, Group 1 has reduced corporate compensation, with cuts as much as 50% for the firm’s CEO. The company is also putting efforts to trim U.S. marketing costs by more than 75%. To preserve liquidity, the firm has suspended payouts and scrapped the buyback program.
Looking Forward
Amid coronavirus-led uncertainty, Group 1 has refrained from providing any guidance. Depressed demand for vehicles amid weak consumer confidence is expected to reflect on its second-quarter results.The firm expects the service business to recover more quickly than vehicle sales.
Zacks Rank & Stocks to Consider
Group 1 currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the auto space include Modine Manufacturing Company (MOD - Free Report) , Unique Fabricating Inc. and Veoneer Inc. , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
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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