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Auto Stock Roundup: SAH, CPRT, MGA Beat on Earnings, AN Lags Estimates

Zacks Equity Research
Edison International (EIX) is a promising bet for investors, courtesy of these four factors.

Some companies from the Auto sector — including Sonic Automotive, Inc. SAH, Copart, Inc. CPRT, AutoNationInc. AN and Magna International Inc. MGA — have reported quarterly results in the past week. During the quarter under review, earnings and revenues of Magna surpassed estimates. Sonic Automotive and Copart also beat on earnings while missing revenue estimates. However, AutoNation’s earnings and revenues missed estimates.

Recap of the Week’s Most Important Stories

1. Sonic Automotive registered adjusted earnings per share of 76 cents in fourth-quarter 2018, beating the Zacks Consensus Estimate of 75 cents. However, the bottom line was lower than the fourth-quarter 2017 figure of 84 cents per share.

Total revenues in the reported quarter were $2.57 billion, down from the prior-year quarter figure of $2.67 billion. Further, revenues missed the Zacks Consensus Estimate of $2.69 billion.

During the reported quarter, revenues from the sale of total new vehicles decreased 11.2% year over year to $1.32 billion. Revenues from used vehicles rose 10.2% to $755.9 million. Wholesale vehicle revenues rose 22% to $49.9 million.

Revenues from parts, services and collision repair decreased 4.5% to $339.3 million while finance, insurance and other revenues rose 9.4% to $109.6 million.

In fourth-quarter 2018, gross profit decreased to $370.7 million from $384.1 million recorded a year ago. Selling, general and administrative expenses decreased to $273.9 million from $277.6 million in the year-ago quarter. The company reported operating income of $58.7 million compared with $77.2 million in the year-ago quarter.

In fourth-quarter 2018, EchoPark stores retailed 8,762 units, up 94.9% on a year-over-year basis. (Read more: Sonic Automotive Q4 Earnings Beat, Revenues Miss)

Sonic Automotive currently carries a Zacks Rank #5 (Strong Sell).

2. Copart reported adjusted earnings per share of 52 cents in second-quarter fiscal 2019 (ended January 31, 2019), beating the Zacks Consensus Estimate of 51 cents.  In the year-ago quarter, the bottom line was 47 cents.

Net income was $131.4 million, reflecting an increase of 27.2% or $28.1 million from second-quarter fiscal 2018.

Copart’s revenues rose 5.6% to $484.9 million from the year-ago quarter. However, revenues missed the Zacks Consensus Estimate of $494.3 million. Compared with the prior-year quarter, service revenues increased to $416.8 million from $402 million. Revenues from the sale of vehicles were $68.1 million in comparison with $57.2 million in second-quarter fiscal 2018.

Gross profit improved to $208.2 million from $191.6 million a year ago. Total operating expenses increased to $320.2 million from $308.2 million recorded in the prior-year period.

Operating income increased to $164.7 million from $150.9 million a year ago.

Copart had cash and cash equivalents of $108.2 million as of Jan 31, 2019, compared with $274.5 million as of Jul 31, 2018. Long-term debt, revolving loan facility and capital lease obligations were $398.7 million as of Jan 31, 2019, similar to the figure recorded on Jul 31, 2018.

At the end of the first six months of fiscal 2019, Copart generated net cash flow of $215.2 million from operations compared with $180.9 million in the year-ago period. (Read more: Copart Q2 Earnings Surpass Estimates, Improve Y/Y)

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

3. In fourth-quarter 2018, AutoNation reported adjusted earnings of $1.10 per share, missing the Zacks Consensus Estimate of $1.14. In the year-ago quarter, earnings had come in at $1.64 per share.

Net income from continuing operations was $93 million compared with $152 million in fourth-quarter 2017.

During the quarter under review, AutoNation’s revenues were $5.41 billion compared with $5.68 billion in the prior-year quarter. The top line also missed the Zacks Consensus Estimate of $5.61 billion.

New-vehicle revenues decreased 8.3% year over year to $3.07 billion in fourth-quarter 2018. Used-vehicle revenues rose 0.4% to $1.21 from the year-ago figure. Parts and service business revenues gained 1.6% from fourth-quarter 2017 to $868 million. Net revenues from the finance and insurance business were $245 million, reflecting a decline of 0.7% from the prior-year quarter.

In 2018, the company recorded net income from continuing operations of $396 million or $4.34 per share compared with $435 million or $4.43 per share in the prior year.

Revenues for the year were $21.4 billion, marking a slight decline from $21.5 billion in 2017. (Read more: AutoNation Lags Earnings Estimates in Q4)

AutoNation currently carries a Zacks Rank #4 (Sell).

4. Magna delivered adjusted earnings per share of $1.63 in fourth-quarter 2018, beating the Zacks Consensus Estimate of $1.60. Further, the bottom line was higher than the year-ago quarter’s figure of $1.58.

Revenues increased 5% year over year to $10.1 billion. Also, revenues surpassed the Zacks Consensus Estimate by 0.44%. Robust sales growth was achieved in a period when global light-vehicle production decreased 4%, led by a 14% decline in China and a 1% fall in Europe, partly offset by 1% rise in North America.

Adjusted EBIT declined to $730 million from the year-ago figure of $813 million.

For 2018, adjusted earnings per share were $6.71, up from the 2017 figure of $5.93.

Revenues for the year were $40.8 billion, up from the 2017 figure of $36.6 billion.

Revenues at the Body Exteriors & Structures segment were $4.2 billion in the reported quarter compared with $4.3 billion recorded in fourth-quarter 2017. Adjusted EBIT declined 1% year over year to $351 million.

Revenues at the Power & Vision segment totaled $3 billion in comparison with $2.9 billion recorded in the prior-year quarter. Adjusted EBIT declined 21% year over year to $253 million.

Revenues at the Seating Systems segment totaled $1.44 billion compared with $1.3 billion in the year-ago quarter. Adjusted EBIT increased 4% year over year to $110 million.

Revenues from the Complete Vehicles segment increased to $1.69 billion in the quarter under review from $1.21 million in fourth-quarter 2017. Adjusted EBIT declined 14% year over year to $24 million. (Read more: Magna Earnings Surpass Estimates in Q4, Improve Y/Y)

Magna currently carries a Zacks Rank #3.

Performance

In the past week, Tesla, Inc. TSLA gained the most while Advance Auto Parts, Inc. AAP saw the worst decline.

In the past six months, AutoZone, Inc. AZO has increased the most. Harley-Davidson, Inc. HOG declined the most.

Company Last Week Last 6 Months
GM 0.10% 7.7%
F -1.8% -12%
TSLA 4% 3.1%
TM -0.4% 1.1%
HMC 3% -6.9%
AAP -4.6% -3.3%
AZO -1% 18.5%
HOG 0.2% -13.6%


What’s Next in the Auto Space?

Watch out for the usual news releases and earnings releases over the next week.

Zacks' Top 10 Stocks for 2019

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AutoNation, Inc. (AN) : Free Stock Analysis Report
 
Sonic Automotive, Inc. (SAH) : Free Stock Analysis Report
 
Tesla, Inc. (TSLA) : Free Stock Analysis Report
 
Advance Auto Parts, Inc. (AAP) : Free Stock Analysis Report
 
AutoZone, Inc. (AZO) : Free Stock Analysis Report
 
Magna International Inc. (MGA) : Free Stock Analysis Report
 
Harley-Davidson, Inc. (HOG) : Free Stock Analysis Report
 
Copart, Inc. (CPRT) : Free Stock Analysis Report
 
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