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Why Asbury (ABG) is Well Positioned for Q4 Earnings Beat
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Asbury Automotive Group, Inc. (ABG - Free Report) is set to release fourth-quarter 2021 results on Feb 15, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $5.86 and $2.43 billion, respectively.
The Zacks Consensus Estimate for Asbury’s fourth-quarter earnings per share has been revised downward by a penny in the past seven days. The bottom-line projection, however, implies year-over-year growth of 32%. Also, the Zacks Consensus Estimate for revenues suggests a year-over-year uptick of 8.7%.
This automotive retailer posted better-than-expected earnings in the last reported quarter, primarily on higher-than-anticipated revenues and earnings from the used-vehicle unit. Precisely, revenues and gross profit from used vehicle sales came in at $879 million and $72.2 million, outpacing the Zacks Consensus Estimate of $731 million and 66 million, respectively.
Over the last trailing quarters, Asbury surpassed earnings estimates on all occasions, with the average being 24.3%. Investors expect Asbury to maintain its earnings beat streak for the fourth quarter of 2021 as well. Encouragingly, our model predicts the same.
Earnings Whispers
Our proven model predicts an earnings beat for Asbury for the to-be-reported quarter, as it has the right combination of the two key ingredients. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: Asbury has an Earnings ESP of +3.72%. This is because the Most Accurate Estimate is pegged 22 cents above the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
During the quarter to be reported, Asbury completed the acquisition of the eighth largest dealership in the United States, Larry H. Miller Dealerships, in a $3.2-billion deal. The buyout bolstered Asbury’s regional footprint and expanded its presence in the high-growth Western markets. The acquired assets include 54 new and seven used-vehicle dealerships along with 11 collision centers. The deal also enhanced the scope of Asbury’s Clicklane omni-channel platform.
During the quarter under discussion, Asbury also acquired Stevinson Automotive. The buyout strengthened Asbury’s foothold in Denver, which is one of the most economically vibrant regions in the United States and an ideal market for strong automotive brands.
The Larry H. Miller and Stevinson buyouts are also likely to somewhat contribute to Asbury’s upcoming results, with full synergies likely to reflect next year. The Larry H. Miller and Stevinson buyouts would add $5.7 billion and $715 million, respectively, to Asbury’s annualized revenues. These deals provide Asbury an edge to execute its five-year plan to generate $20 billion in annual revenues by 2025.
Things to Note
Courtesy of economic recovery from the pandemic lows and preference for personal mobility, demand for vehicles has been on the rise, which is likely to have aided Asbury’s sales. The automotive retailer’s fourth-quarter results will reflect the rising average prices of both new and used vehicles. Higher year-over-year projected gross profits from all segments are likely to buoy Asbury’s upcoming results.
Take a look into the Zacks Consensus Estimate for the firm’s fourth-quarter 2021 revenues and gross profits from major units.
The consensus mark for quarterly sales from the Used Vehicle segment is $820 million, calling for a jump from the $659 million registered in the corresponding quarter of 2020. The same for the segmental gross profit is $71 million, indicating a surge from the prior-year quarter’s $39.6 million.
The consensus mark for quarterly sales from the Parts and Service segment is pegged at $307 million, suggesting a rise from the $262 million registered in the year-earlier quarter. The same for the segmental gross profit is $185 million, indicating a surge from the prior-year quarter’s $163 million.
The Zacks Consensus Estimate for revenues from the Finance and Insurancesegment is pegged at $97 million for the period in discussion, calling for growth from the $87 million reported in the prior-year quarter. The consensus mark for the segment’s gross profit is $103 million, calling for a rise from the $87 million in fourth-quarter 2020.
The Zacks Consensus Estimate for Asbury’s New Vehicle segment revenues is pegged at $1,173 million for the period in discussion, suggesting a decline from the $1,226 million reported in the prior-year quarter. Nonetheless, the consensus mark for the segment’s gross profit is $123 million, calling for a rise from the $83 million in fourth-quarter 2020.
Other Auto Retailers Poised to Top Earnings Estimates
Sonic Automotive (SAH - Free Report) has an Earnings ESP of +4.87% and a Zacks Rank #1. The company is set to report fourth-quarter 2021 earnings on Feb 16.
The Zacks Consensus Estimate for Sonic’s to-be-reported quarter’s earnings and revenues is pegged at $1.83 per share and $3.17 billion, respectively. SAH surpassed earnings estimates in the last four quarters, with an average of 25.4%.
AutoNation (AN - Free Report) has an Earnings ESP of +1.97% and a Zacks Rank #2. The company is set to report fourth-quarter 2021 earnings on Feb 17.
The Zacks Consensus Estimate for AutoNation’s to-be-reported quarter’s earnings and revenues is pegged at $5 per share and $6.37 billion, respectively. AN surpassed earnings estimates in the last four quarters, with an average of 40.9%.
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Why Asbury (ABG) is Well Positioned for Q4 Earnings Beat
Asbury Automotive Group, Inc. (ABG - Free Report) is set to release fourth-quarter 2021 results on Feb 15, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $5.86 and $2.43 billion, respectively.
The Zacks Consensus Estimate for Asbury’s fourth-quarter earnings per share has been revised downward by a penny in the past seven days. The bottom-line projection, however, implies year-over-year growth of 32%. Also, the Zacks Consensus Estimate for revenues suggests a year-over-year uptick of 8.7%.
This automotive retailer posted better-than-expected earnings in the last reported quarter, primarily on higher-than-anticipated revenues and earnings from the used-vehicle unit. Precisely, revenues and gross profit from used vehicle sales came in at $879 million and $72.2 million, outpacing the Zacks Consensus Estimate of $731 million and 66 million, respectively.
Over the last trailing quarters, Asbury surpassed earnings estimates on all occasions, with the average being 24.3%. Investors expect Asbury to maintain its earnings beat streak for the fourth quarter of 2021 as well. Encouragingly, our model predicts the same.
Earnings Whispers
Our proven model predicts an earnings beat for Asbury for the to-be-reported quarter, as it has the right combination of the two key ingredients. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: Asbury has an Earnings ESP of +3.72%. This is because the Most Accurate Estimate is pegged 22 cents above the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Asbury currently carries a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Key Highlights
During the quarter to be reported, Asbury completed the acquisition of the eighth largest dealership in the United States, Larry H. Miller Dealerships, in a $3.2-billion deal. The buyout bolstered Asbury’s regional footprint and expanded its presence in the high-growth Western markets. The acquired assets include 54 new and seven used-vehicle dealerships along with 11 collision centers. The deal also enhanced the scope of Asbury’s Clicklane omni-channel platform.
During the quarter under discussion, Asbury also acquired Stevinson Automotive. The buyout strengthened Asbury’s foothold in Denver, which is one of the most economically vibrant regions in the United States and an ideal market for strong automotive brands.
The Larry H. Miller and Stevinson buyouts are also likely to somewhat contribute to Asbury’s upcoming results, with full synergies likely to reflect next year. The Larry H. Miller and Stevinson buyouts would add $5.7 billion and $715 million, respectively, to Asbury’s annualized revenues. These deals provide Asbury an edge to execute its five-year plan to generate $20 billion in annual revenues by 2025.
Things to Note
Courtesy of economic recovery from the pandemic lows and preference for personal mobility, demand for vehicles has been on the rise, which is likely to have aided Asbury’s sales. The automotive retailer’s fourth-quarter results will reflect the rising average prices of both new and used vehicles. Higher year-over-year projected gross profits from all segments are likely to buoy Asbury’s upcoming results.
Take a look into the Zacks Consensus Estimate for the firm’s fourth-quarter 2021 revenues and gross profits from major units.
The consensus mark for quarterly sales from the Used Vehicle segment is $820 million, calling for a jump from the $659 million registered in the corresponding quarter of 2020. The same for the segmental gross profit is $71 million, indicating a surge from the prior-year quarter’s $39.6 million.
The consensus mark for quarterly sales from the Parts and Service segment is pegged at $307 million, suggesting a rise from the $262 million registered in the year-earlier quarter. The same for the segmental gross profit is $185 million, indicating a surge from the prior-year quarter’s $163 million.
The Zacks Consensus Estimate for revenues from the Finance and Insurance segment is pegged at $97 million for the period in discussion, calling for growth from the $87 million reported in the prior-year quarter. The consensus mark for the segment’s gross profit is $103 million, calling for a rise from the $87 million in fourth-quarter 2020.
The Zacks Consensus Estimate for Asbury’s New Vehicle segment revenues is pegged at $1,173 million for the period in discussion, suggesting a decline from the $1,226 million reported in the prior-year quarter. Nonetheless, the consensus mark for the segment’s gross profit is $123 million, calling for a rise from the $83 million in fourth-quarter 2020.
Other Auto Retailers Poised to Top Earnings Estimates
Sonic Automotive (SAH - Free Report) has an Earnings ESP of +4.87% and a Zacks Rank #1. The company is set to report fourth-quarter 2021 earnings on Feb 16.
The Zacks Consensus Estimate for Sonic’s to-be-reported quarter’s earnings and revenues is pegged at $1.83 per share and $3.17 billion, respectively. SAH surpassed earnings estimates in the last four quarters, with an average of 25.4%.
AutoNation (AN - Free Report) has an Earnings ESP of +1.97% and a Zacks Rank #2. The company is set to report fourth-quarter 2021 earnings on Feb 17.
The Zacks Consensus Estimate for AutoNation’s to-be-reported quarter’s earnings and revenues is pegged at $5 per share and $6.37 billion, respectively. AN surpassed earnings estimates in the last four quarters, with an average of 40.9%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.