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Sonic Automotive (SAH) Q4 Earnings Top, Sales Lag Estimates

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Sonic Automotive, Inc. SAH registered adjusted earnings per share of 97 cents in fourth-quarter 2019, beating the Zacks Consensus Estimate of 89 cents. Moreover, the bottom line rose from 76 cents per share reported in the year-ago quarter. The outperformance was driven by higher-than-expected gross profit from new and used-vehicle units.

Total revenues in the reported quarter amounted to $2,748.4 million, up 6.7% from the prior-year period. However, revenues missed the Zacks Consensus Estimate of $2,766 million.

Sonic Automotive, Inc. Price, Consensus and EPS Surprise

Sonic Automotive, Inc. Price, Consensus and EPS Surprise

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

Key Takeaways

During the reported quarter, revenues from the sale of new vehicles grew 3% year over year to $1,360.1 million. Gross profit increased to $67.6 million from $65.8 million recorded in the year-ago period. The metric also surpassed the consensus mark of $64 million.

Revenues from the sale of total used vehicles rose 15% from the prior-year quarter to $869.7 million. Unit sales rose from 35,135 a year ago to 39,775 in the quarter under review. Gross profit increased 9.6% year over year to $36.8 million in the fourth quarter of 2019. The metric also topped the Zacks Consensus Estimate of $36 million.

Wholesale vehicle revenues decreased 6.6% on a year-over-year basis to $46.6 million. Nonetheless, gross loss narrowed from $2.2 million in the year-ago quarter to $1.3 million.

Revenues from parts, services and collision repair grew 2.1% year over year to $346.5 million. Gross profit increased $165.3 million in the quarter under review from $163.8 million in the year-ago period.

Finance, insurance and other revenues rose 14.5% on a year-over-year basis to $125.5 million.

Selling, general and administrative expenses decreased to $260.9 million from $273.9 million in the year-ago quarter. The company recorded operating income of $92.2 million compared with $58.7 million in the year-ago quarter.

In the quarter under review, the EchoPark segment recorded revenues of $308.6 million, reflecting a 52% uptick from the year-ago figure. Its stores sold 12,676 units, up 45% on a year-over-year basis. The segment registered income of $2.1 million, up 145% year over year.

Dividend Payment

The board of directors announced a quarterly dividend of 10 cents per share, which will be paid on Apr 15, 2020 to its shareholders of record as of Mar 13, 2020.

Zacks Rank & Stocks to Consider

Sonic Automotive currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Auto-Tires-Trucks sector include AutoNation, Inc. AN, Group 1 Automotive, Inc. GPI and America's Car-Mart, Inc. CRMT, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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