Sonic Automotive Earnings Rise but Miss

Zacks

Sonic Automotive Inc. (SAH) posted a 13.9% rise in earnings per share to 41 cents in the first quarter of 2013 compared with 36 cents per share in the corresponding quarter last year, but missed the Zacks Consensus Estimate by a penny. Net income improved 2.6% to $21.7 million from $21.1 million in the first quarter of 2012.

Revenues in the quarter improved 8.1% to $2.08 billion, marginally beating the Zacks Consensus Estimate of $2.04 billion. The increase in revenues was driven by higher revenues in all the businesses. Unit sales of new retail vehicles augmented 7.4% to 30,590 units and used vehicle sales improved 3.9% to 26,469 units.

Revenues from new vehicles retailed rose 10.8% to $1.1 billion while revenues from used vehicle (retail and wholesale) went up 5.9% to $578.0 million during the quarter. Revenues from parts and service escalated 1.4% to $296.6 million and finance and insurance business grew 13.7% to $65.5 million.

Gross profits improved 3.1% to $313.0 million in the quarter compared with $303.8 million a year ago. Selling, general and administrative expenses rose 3.7% to $245.8 million in the quarter. However, operating income declined to $55.0 million or 2.6% of sales from $55.7 million or 2.9% of sales in the first quarter of 2012.

Charlotte, N. C. based Sonic Automotive is a Fortune 500 company. It is one of the largest automotive retailers in the U.S. The company currently operates 100 dealerships spread across 15 states and 26 major metropolitan markets. It represents about 30 different automotive brands with the majority of the dealerships being luxury and import brands. Sonic Automotive currently retains a Zacks Rank #3 (Hold).

Some other stocks that are performing well in the industry where Sonic Automotive operates include Asbury Automotive Group, Inc. (ABG), AutoNation Inc. (TOWR) and CarMax Inc. (KMX). All these companies carry a Zacks Rank #2 (Buy).
 

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