Group 1 Earnings Beat on Strong Sales


Group 1 Automotive Inc. (GPI) posted a 19.6% rise in earnings per share to $1.16 in the first quarter of 2013 from 97 cents in the prior-year quarter and outpaced the Zacks Consensus Estimate of $1.04. Net income grew 26.5% to $29.2 million from $23.1 million in the first quarter of 2012.

Revenues increased 18% to $1.96 billion, beating the Zacks Consensus Estimate of $1.89 billion. The year-over-year improvement was driven by strong retail new vehicle and used vehicle unit sales and higher revenues from Finance and insurance business.

Revenues from new vehicle sales escalated 21.7% to $1.1 billion on an 18.5% increase in unit sales to 33,096 vehicles. Revenues from retailed used vehicles improved 13.6% to $471.4 million on a 12% increase in unit sales to 23,238 vehicles.

Revenues from wholesale used vehicles went up 11.5% to $74.5 million. Used vehicles wholesaled increased 13.4% to 11,335 units. Revenues from parts and service business scaled up 11.5% to $237.5 million. The company’s finance and insurance business witnessed a 22.6% rise in revenues to $70.1 million.

Gross profit increased 15.4% to $300.5 million from $260.4 million in the year-ago quarter. Operating income improved 8.6% to $58.6 million from $54.0 million in the first quarter of 2012.

Segment Details

Revenues in the U.S business increased 8.5% to $1.7 billion due to a 10.3% increase in new vehicle retail sale and 18.9% hike in revenues from Finance and insurance business. New vehicle retail sales augmented 7.4% to 28,778 units, while used vehicle retail sales rose 6.1% to 21,116 units. Gross profit in the segment improved 8.8% to $272.9 million from $250.9 million in the year-ago quarter.

Revenues in the United Kingdom business more than doubled to $171.1 million from $78.5 million due to increases in new vehicle retail and used vehicle sales. New vehicle retail sales augmented significantly to 2,827 units from 1,147 units, while total used vehicle sales improved to 3,171 units from 1,544 units. Gross profit in the segment enhanced to $19.2 million from $9.5 million in the year ago quarter.

Revenues in the Brazil business, which was acquired on Feb 28, was $71.0 million in the quarter. New vehicle retail sales were 1,491 units, while total used vehicle sales was 629 units. Gross profit was $8.4 million in the quarter.

Financial Details

Group 1 Automotive had cash and cash equivalents of $17.7 million as of Mar 31, 2013, significantly up from $4.7 million as of Dec 31, 2012. Total debt amounted to $37.2 million as of Mar 31, 2013 compared with $31.4 million as of Dec 31, 2012. Debt to capitalization ratio was 3.7% versus 3.5% a year ago.


During the quarter, Group 1 Automotive acquired four franchises in the U.K and 22 franchises in Brazil, with combined annual revenues of $827.0 million. It also disposed a franchise in Calif. which generated annual revenues of $35.0 million in 2012.

Our Take

Group 1 Automotive is one of the largest automotive retailers in the U.S., which provides 35 automotive brands. It has 143 automotive dealerships, 182 franchises and 36 collision centers in the U.S., U.K and Brazil. Currently, the company retains a Zacks Rank #3 (Hold).

Some other stocks that are performing well in the industry where Group 1 Automotive operates include Asbury Automotive Group, Inc. (ABG), AutoNation Inc. (AN) and Lithia Motors Inc. (LAD). All these companies carry a Zacks Rank #2 (Buy).

Read the Full Research Report on GPI

Read the Full Research Report on AN

Read the Full Research Report on LAD

Read the Full Research Report on ABG

Zacks Investment Research

More From


View Comments (0)

Recommended for You

  • Play

    Why deflation is so scary

    Falling prices may sound wonderful, but they can be a lot more destructive than inflation.

    Yahoo Finance
  • Apple investors don’t need numbers to measure success

    The company’s earnings and revenue, expected today, are only part of the story, writes Marek Fuchs.

  • The Filthy-Rich 50: Meet the richest person in each U.S. state

    They’re not all billionaires, but they’re probably richer than you.

  • Warren Buffett just lost $1 billion on this

    Warren Buffett does not like to lose money in general, so losing $1 billion before lunch on a Monday morning can not be going down well.

  • Play

    Parents pay the price for children’s student debt

    Parents who want to provide for their children's college education are being stretched to the brink with student loans.

    Yahoo Finance
  • Are 401(k) Plans Setting Up Millennials for Pain?

    Rob Arnott, one of the investment world’s Big Thinkers, has advanced a worrying argument: that an investing approach devised to help us more safely and sensibly steer toward retirement may actually backfire. The argument concerns target-date retirement funds, whose allocation shifts away from…

    The Fiscal Times
  • Play

    Selloff a Blip for Buy and Hold Investors: Shalett

    Oct. 20 (Bloomberg) -- Lisa Shalett, head of investment and portfolio strategies at Morgan Stanley, and David Woo, head of global rates and currency research at Bank of America Merrill Lynch, discuss what the global selloff means to investors and why recent economic good news seems to go ignored.…

  • Market turmoil: A gift for mortgage refinancers?

    A sudden plunge in mortgage rates last week raised an urgent question for millions of Americans: Should I refinance my mortgage? Across the country, homeowners and would-be homeowners eager for a bargain ...

    Associated Press
  • Gold Goes Up As U.S. Dollar Falls Down

    Gold futures rose as the U.S. Last week’s stock market turmoil was a boon for gold prices. Gold and stocks tend to move in opposite directions as the precious metal is seen as a store of value and a hedge against economic turbulence, while equities tend to benefit from U.S.
  • The 1987 Crash and a Dose of Perspective

    The anniversary of the 1987 stock-market crash over the weekend offers some perspective on this month’s stock volatility.

    The Wall Street Journal
  • Will High Price Hurt Gilead Sciences' New Hep-C Drug?

    Last week, Gilead Sciences (GILD) finally got the go-ahead on Hepatitis-C treatment Harvoni, which combines Solvaldi with Ledipsavir, and is supposed to cure from 94% to 99% of patients. RBC Capital Markets' Michael Yee and team assess the headwinds to Harvoni's uptake and find them wanting: We've…
  • Is the oil price fall more than just a coincidence?

    The recent drop in oil prices could be due to more than just lower demand, according to some analysts, who have suggested that the U.S. could be deliberately manipulating the market.

  • Play

    Here's why renters in America feel trapped

    In a recent report by the FINRA Investor Education Foundation, researchers offer a sobering peek into the homes (and finance) of renters. It's not a pretty picture.

    Yahoo Finance
  • Play

    How Apple Pay for iPhone 6 Works in Real Stores

    Oct. 20 (Bloomberg) -- Apple Pay for iPhone 6 and iPhone 6 Plus devices arrives at select retailers today. Bloomberg Businessweek's Kyle Stock takes a hand-on look at how it works. Video by: Jenna Savino, Victoria Blackburne-Daniell (Source: Bloomberg)

  • 3 Cloud and Communication Stocks to Buy With Big Dividends and Upside

    Oppenheimer analysts think that the top picks in cloud and communication stocks offer superb growth potential.

    24/7 Wall St.
  • Marc Andreessen exits eBay’s board ahead of its PayPal spinoff

    After six years serving on Ebay's board of directors, Silicon Valley luminary is stepping down.

  • 13 Retailers Where You Can Use Apple Pay Today

    The newest entry into mobile payments, Apple Pay, launched Monday at dozens of in-store and online retailers.
  • When the Markets Get Noisy, Invest $5

    I’ve started playing this game during market volatility: When someone tells me the market is scary, I increase my investments. It takes the desire to act and harnesses it for good.

    The New York Times
  • Ferrovial makes A$1bn takeover bid for Australia's Transfield

    Spanish infrastructure group Ferrovial has made a A$1bn (US$877m) takeover bid for Transfield Services, the outsourcing and construction services company that runs Australia's offshore immigration detention ...

    Financial Times
  • U.S. risks trade sanctions in WTO meat label dispute

    By Tom Miles and Krista Hughes GENEVA/WASHINGTON (Reuters) - The United States faces potential trade sanctions from Canada and Mexico after the World Trade Organization ruled on Monday it had failed to bring its meat labeling regulations fully in line with international fair trading rules. The WTO…