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Asbury (ABG) Beats Q1 Earnings Mark, Lifts Long-Term Targets

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Asbury Automotive ABG reported first-quarter 2022 adjusted earnings of $9.27 per share, which skyrocketed 98% year over year and topped the Zacks Consensus Estimate of $8.92. This outperformance can be primarily attributed to higher-than-expected sales from Used Vehicle, Parts & Services, and Finance & Insurance units. For the reported quarter, revenues amounted to $3,912 million, surging 78% year over year. The top line also outpaced the Zacks Consensus Estimate of $3,837 million.

Asbury Automotive Group, Inc. Price, Consensus and EPS Surprise

Asbury Automotive Group, Inc. Price, Consensus and EPS Surprise
Asbury Automotive Group, Inc. Price, Consensus and EPS Surprise

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

Segment Details

For the quarter, new-vehicle revenues jumped 61% year over year to $1,855.6 million but missed the Zacks Consensus Estimate of $1,883 million. Gross profit from the segment came in at $224 million, soaring 197% from the prior-year quarter but missing the consensus mark of $240 million.

Used-vehicle revenues also rose 96% from the year-ago figure to $1,350.9 million, beating the consensus mark of $1,306 million. Gross profit from the segment came in at $99.3 million, which surged 78% but missed the consensus mark of $106 million.

Net revenues in the finance and insurance business amounted to $203.4 million, increasing 130% from the year-ago quarter and outpacing the consensus mark of $171 million. Gross profit was $192.2 million, rising 107% year over year and beating the consensus mark of $162 million.

Revenues from the parts and service business rose 92% from the prior-year quarter to $502 million and topped the consensus mark of $460 million. Gross profit from this segment came in at $276.5 million, rising 70% year over year but falling short of the consensus mark of $279 million.

Other Tidbits

Selling, general & administrative (SG&A) expenses as a percentage of gross profit came in at 57.5% for the quarter under discussion, decreasing 520 basis points year over year. Asbury sold 5,600 vehicles (of which 38% were new and 62% were used) through the “end-to-end” online sales platform, Clicklane.

Year to date, ABG completed seven divestitures, including four that were closed in the quarter under review, and garnered proceeds of $327 million. As of Mar 31, the company had cash/cash equivalents of $284.3 million and long-term debt of $3,403.3 million.

During the quarter under discussion, Asbury repurchased 1.1 million shares for $200 million. To investors’ delight, it authorized a new share repurchase program of up to $200 million.

The company also provided an update to the 2025 strategic growth plan. When ABG originally launched this plan in 2020, it targeted revenue growth from $8 billion to $20 billion in 2025. But thanks to the significant progress made last year, the firm has raised the revenue target to $32 billion by 2025. The incremental $12 billion will likely comprise $2 billion of same-store sales growth, $3 billion from Clicklane and $7 billion from acquisitions. The company aims to generate EPS of more than $55 a share by 2025.

Asbury currently carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank stocks here.

Peer Releases

Lithia Motors LAD reported first-quarter 2022 adjusted earnings of $11.96 per share, marking a whopping 103% increase from the prior-year period’s $5.89. The bottom line also beat the Zacks Consensus Estimate of $9.63 per share. Higher-than-expected revenues from new vehicle, used vehicle (retail and wholesale) and fleet and others segments led to the upside. 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.

The company 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 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. For the reported quarter, revenues amounted to $6,752.8 million, up 14.4% year over year. The top line also 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.

Penske Automotive PAG reported impressive first-quarter 2022 adjusted earnings of $4.76 per share, increasing a whopping 110.6% year over year and surpassing the Zacks Consensus Estimate of $3.94. Higher-than-expected gross profit in the Retail Automotive and Retail Commercial Truck segments resulted in this outperformance. The auto retailer registered net sales of $6,975.4 million, outpacing the Zacks Consensus Estimate of $6,257.2 million. The top line also rose 20.8% from the year-ago quarter.

For the quarter under review, Penske incurred SG&A costs of $797.8 million, up 20.1% year over year. The company had cash and cash equivalents of $170.3 million as of Mar 31, 2022, up from $100.7 million at 2021-end. Long-term debt amounted to $1,383.9 million, slightly down from $1,392 million as of Dec 31, 2021. PAG repurchased 1.2 million shares of common stock for nearly $119.2 million during the quarter under review. As of Apr 26, 2022, around $46.3 million remained available for repurchase under its existing share repurchase authorization.


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