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Asbury Automotive (ABG) to Post Q3 Earnings: What's in Store?

Zacks Equity Research

Asbury Automotive Group, Inc. ABG is set to report third-quarter 2019 results on Oct 22, before the opening bell. The current Zacks Consensus Estimate for the quarter to be reported is earnings of $2.38 per share on revenues of $1.85 billion.

The retailer of used and new vehicles reported better-than-expected results in the last reported quarter on higher sales.

Asbury Automotive has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in each of the last four quarters, the average being 11.29%. This is depicted in the graph below:

Asbury Automotive Group, Inc. Price and EPS Surprise

Asbury Automotive Group, Inc. Price and EPS Surprise

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

Which Way are Top and Bottom-Line Estimates Headed?

The Zacks Consensus Estimate for third-quarter earnings per share has remained unchanged in the past 60 days at $2.38. The company reported earnings of $2.21 per share in the year-ago quarter.

The Zacks Consensus Estimate for revenues is pegged at $1.85 billion, suggesting an uptick of 5.1% from the year-ago reported figure.

What the Zacks Model Says

Our proven model shows that Asbury Automotive is likely to beat estimates this quarter. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is the case here, as you will see below:

Earnings ESP: Earnings ESP for Asbury Automotive is +4.53%. The Most Accurate Estimate and the Zacks Consensus Estimate are currently pegged at $2.49 per share and $2.38, respectively. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Asbury Automotive currently carries a Zacks Rank #3.

Factors at Play

The company is expected to have benefitted from its omni-channel and digital marketing approaches to improve customer experience. Asbury Automotive’s commitment toward efficient digital capabilities, launching online sales tools and improving online financial capabilities has likely contributed to growth. Its sales tool, which enables customers to complete online transactions, is likely to have contributed to top-line growth.

The Zacks Consensus Estimate for new-vehicle sale is pegged at 1002 units, which suggests an increase of 2.2% on a year-over-year basis. Moreover, estimates for gross profit for new vehicles are pegged at $40.10 million, which indicates an increase of 4.9% on a year-over-year basis.

The Zacks Consensus Estimate for used-vehicle sale is pegged at 525 units, which implies an increase of 5.5% on a year-over-year basis. Moreover, estimates for gross profit for used vehicles are pegged at $35.20 million, which suggests an increase of 7.3% on a year-over-year basis.

The Zacks Consensus Estimate for parts and services sale is pegged at 227 units, which suggests an increase of 10.1% on a year-over-year basis. Moreover, estimates for gross profit for parts and services are pegged at $142 million, which indicates an increase of 9.4% on a year-over-year basis.

We believe that the company’s continued efforts to enhance online capabilities along with its focus toward used retail segment are likely to buoy earnings results.

Other Stocks to Consider

Here are some other companies from the same space, which also have the right combination of elements to post an earnings beat this earnings season.

Tesla, Inc. TSLA is set to report third-quarter 2019 earnings results on Oct 23. It has an Earnings ESP of +116.67% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Veoneer, Inc.  VNE is set to report third-quarter 2019 earnings results on Oct 23. It currently has an Earnings ESP of +7.17% and a Zacks Rank #2.

Harley-Davidson, Inc. HOG  is set to report third-quarter 2019 earnings results on Oct 22. It presently  has an Earnings ESP of +0.70% and a Zacks Rank #3.

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