Sonic Automotive (SAH) Q2 Earnings Miss, Revenues Beat - Analyst Blog
Sonic Automotive Inc. SAH reported second-quarter 2015 adjusted earnings per share of 46 cents, which were higher than the year-ago quarter figure of 44 cents. However, earnings per share missed the Zacks Consensus Estimate by 1 cent. Net income inched down to $23.4 million from $23.5 million in the second quarter of 2014.
On a reported basis, Sonic Automotive’s earnings from continuing operations stood at $15.1 million or 30 cents per share, down from $27.1 million or 51 cents per share in the prior-year quarter. The second-quarter 2015 reported figure includes a gain on disposal of $0.65 million, offset by storm damage and impairment charges of $2.6 million and $6.4 million, respectively. On the other hand, the year-ago figure included a gain on disposal of $4.5 million, partly offset by storm damage of $0.8 million.
Total revenue in the quarter rose 3% year over year to $2.42 billion. Moreover, revenues surpassed the Zacks Consensus Estimate of $2.36 billion. The year-over-year improvement was driven by solid performance across most business operations of the company.
Revenues from new vehicles dropped 0.3% to $1.3 billion, while revenues from used vehicles increased 9.1% to $658.8 million in the quarter. Wholesale vehicle revenues fell 8.1% to $41.1 million. Revenues from parts, service and collision repair increased 5.2% to $346.2 million, while finance, insurance and other revenues grew 7.3% to $82.4 million.
Gross profit improved 2.5% to $355.6 million in the quarter from $346.9 million a year ago. Selling, general and administrative expenses increased 5.9% to $284.7 million in the quarter. Moreover, operating income declined to $43.1 million (1.8% of sales) from $63.6 million (2.7% of sales) in the second quarter of 2014.
Dividend Update
The board of directors of Sonic Automotive also approved a quarterly dividend of 2.5 cents per share. The dividend will be paid on Oct 15, to shareholders on record as of Sep 15, 2015.
Charlotte, NC-based Sonic Automotive is a Fortune 500 company and one of the prominent automotive retailers in the U.S. The company currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Better-ranked automobile stocks include The Goodyear Tire & Rubber Company GT, PACCAR Inc. PCAR and Pep Boys - Manny, Moe & Jack PBY. Pep Boys currently sports a Zacks Rank #1 (Strong Buy), while both PACCAR and Goodyear carry a Zacks Rank #2 (Buy).
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