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Is Sonic (SAH) Set to Pull Off Q1 Earnings & Sales Beat?

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Sonic Automotive (SAH - Free Report) is set to release first-quarter 2022 results on Apr 28, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $2.45 and $3.73 billion, respectively.

The Zacks Consensus Estimate for Sonic’s first-quarter earnings per share has been revised upward by 3 cents in the past 30 days. The bottom-line projection implies year-over-year growth of 99%. Also, the Zacks Consensus Estimate for revenues suggests a year-over-year uptick of 34%.

This automotive retailer posted better-than-expected earnings in the last reported quarter, primarily on higher-than-anticipated gross profit on new and used vehicle units. Over the last trailing quarters, Sonic surpassed earnings estimates on all occasions, with the average being 35.5%. Investors expect SAH to maintain its earnings beat streak for the first quarter of 2022 as well. Encouragingly, our model predicts the same.

Sonic Automotive, Inc. Price and EPS Surprise

Sonic Automotive, Inc. Price and EPS Surprise

Sonic Automotive, Inc. price-eps-surprise | Sonic Automotive, Inc. Quote

Earnings Whispers

Our proven model predicts an earnings beat for Sonic 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: Sonic has an Earnings ESP of +10.38%. This is because the Most Accurate Estimate is pegged 25 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: SAH currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors at Play

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 sales of Sonic. Even though tight inventory may have played a spoilsport to some extent, the rising average selling price for new and used cars amid supply-demand mismatch is likely to have fueled first-quarter revenues. Strong growth from the firm’s EchoPark unit is anticipated to boost Sonic’s upcoming results.

Sonic’s first-quarter 2022 results will reflect buyout synergies. The buyout of RFJ Auto Partners, completed in December 2021, is expected to add $3.2 billion to Sonic’s annual revenues. This development is likely to have aided Sonic’s Q1 top-line growth.

Below we have highlighted the Zacks Consensus Estimate for the firm’s first-quarter 2022 revenues and gross profits from major units.

The Zacks Consensus Estimate for Sonic’s New Vehicle segment revenues is pegged at $1,446 million for the period in discussion, suggesting an uptick from the $1,156 million reported in the prior-year quarter. The consensus mark for the segment’s gross profit is $182 million, calling for a rise from the $69 million in first-quarter 2021.

The consensus mark for quarterly sales from the Used Vehicle segment is $1,330 million, calling for a jump from the $1,090 million registered in the corresponding quarter of 2021. The same for the segmental gross profit is $60 million, indicating a surge from the prior-year quarter’s $32 million.

The consensus mark for quarterly sales from the Wholesale Vehicle segment is $196 million, calling for a jump from the $75 million registered in the corresponding quarter of 2021. The same for the segmental gross profit is $1.54 million, indicating a surge from the prior-year quarter’s $736,000.

The consensus mark for quarterly sales from the Parts, Service & Collison Repair segment is pegged at $418 million, suggesting a rise from the $321 million registered in the year-earlier quarter. The same for the segmental gross profit is $202 million, indicating a surge from the prior-year quarter’s $156 million.

The Zacks Consensus Estimate for revenues from the Finance and Insurance segment is pegged at $149 million for the period in discussion, calling for modest growth from the $145 million reported in the prior-year quarter. The consensus mark for the segment’s gross profit is $136 million, calling for a rise from the $97.5 million in first-quarter 2021.

Peer Releases

Lithia Motors (LAD - Free Report) reported first-quarter 2022 results on Apr 20. It posted adjusted earnings of $11.96 per share, marking a whopping 103% increase from the prior-year quarter’s $5.89 and beating the Zacks Consensus Estimate of $9.63. Total revenues jumped 54% year over year to $6,705.3 million. The top line also exceeded the Zacks Consensus Estimate of $6,031.8 million.

Lithia approved a dividend of 42 cents per share for first-quarter 2022, which marks an increase from the previous payout of 35 cents. Year to date, LAD has repurchased 515,130 shares at a weighted average price of $292.80. Nearly $572 million is remaining under its authorization. Lithia had cash and cash equivalents of $161.4 million as of Mar 31, 2022, down from $174.8 million on Dec 31, 2021. Long-term debt was $3,395.2 million, marking an increase from $3,185.7 million as of Dec 31, 2021.

AutoNation (AN - Free Report) reported first-quarter 2022 results on Apr 21. The company reported first-quarter 2022 adjusted earnings of $5.78 per share, which skyrocketed 103% year over year and topped the Zacks Consensus Estimate of $5.39. This outperformance can be primarily attributed to higher-than-expected used vehicle sales. Revenues totaled $6,752.8 million, which increased 14.4% year over year and outpaced the Zacks Consensus Estimate of $6,628.1 million.

AutoNation’s cash and cash equivalents were $608.1 million as of Mar 31, 2022, reflecting a sharp rise from $350 million in the year-ago period. The company’s liquidity was $2.4 billion, including $608 million in cash and nearly $1.8 billion availability under the revolving credit facility. The firm’s inventory was valued at $1,698.3 million. At first quarter-end, non-vehicle debt was $3,548.3 million. Capital expenditure for the quarter amounted to $50.8 million. During the reported quarter, AutoNation repurchased 3.5 million shares of common stock for an aggregate purchase price of $381 million. On Apr 19, it had around $376 million remaining for share buyback under the current authorization.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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