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Group 1 Automotive (GPI) Q2 Earnings Top Estimates, Rise Y/Y

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Group 1 Automotive (GPI) Q2 Earnings Top Estimates, Rise Y/Y

Group 1 Automotive's (GPI) Q2 results reflect robust U.S Vehicle market, cost-cutting measures and capital deployment activities.

Group 1 Automotive Inc. GPI reported adjusted earnings per share of $2.45 in second-quarter 2018, beating the Zacks Consensus Estimate of $2.18. The bottom line improved substantially from the prior-year quarter’s $1.87. Results were aided by strong U.S Vehicle market in June, major cost reduction initiative and gains from capital deployment.
 
The company recorded net income of $56.5 million compared with $39.1 million in the year-ago quarter. Revenues of $2.9 billion increased 10.2% year over year.

Revenues from new-vehicle retail sales rose 7.4% to $1.55 billion.The same from retailed used vehicles grew 19.8% to $822 million. However, the metric from wholesale used-vehicle sales declined 6.6% to $93 million.

At the Parts and Service business, the top line improved 8% to $358.1 million. Also, the company’s Finance and Insurance business witnessed an 8% gain in revenues to $115 million.

Gross profit was up 8.2% year over year to $438 million. Operating income went up 18.4% to $109 million.

Group 1 Automotive, Inc. Price, Consensus and EPS Surprise

 

Group 1 Automotive, Inc. Price, Consensus and EPS Surprise | Group 1 Automotive, Inc. Quote

Segment in Details

On a same-store basis, revenues in the U.S. business segment rose 0.3% to $2.12 billion. New-vehicle retail sales declined 1.6% to $1.12 billion. Total used-vehicle sales rose 3.3% to $621 million. Parts and Service revenues increased 1% while Finance and Insurance revenues rose 1.5%.

Revenues, on a same-store basis, increased 13.6% year over year to $493 million at the U.K. business segment. Retail new-vehicle sales improved 10.5% to $254 million and total used-vehicle sales rose 16.8% to $184 million. Parts and Service revenues improved 16.2% and Finance and Insurance revenues rose 22.2%.

On a same-store basis, revenues in the Brazil business declined 5.8% year over year to $105 million in the reported quarter. New-vehicle retail sales decreased 8.7% to $67 million, while total used-vehicle sales rose 4.3% to $25 million. Parts and Service revenues declined 8% and Finance and Insurance revenues fell 6%.

Financial Details

Group 1 Automotive’s cash and cash equivalents increased to $41.5 million as of Jun 30, 2018, from $28.8 million as of Dec 31, 2017.

Share Repurchases

In second-quarter 2018, Group 1 Automotive repurchased 610,752 outstanding shares.

In July 2018, the company bought back an additional 367,773 shares for $25.0 million. As of Jul 25, 2018, Group 1 Automotive had $73.4 million remaining under the share repurchase authorization.

Zacks Rank & Key Picks

Group 1 Automotive carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the auto space are Oshkosh Corporation OSK, AB Volvo VLVLY and Fox Factory Holding Corp. FOXF, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Oshkosh has an expected long-term growth rate of 18.3%. Over the past year, shares of the company have moved up 7.3%.

AB Volvo has an expected long-term growth rate of 15%. Over the past year, shares of the company have gained 2.3%.

Fox Factory has an expected long-term growth rate of 15.8%. Shares of the company have risen 30.2% over the past year.

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Group 1 Automotive, Inc. (GPI) : Free Stock Analysis Report
 
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