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Group 1 (GPI) Q4 Earnings Miss Estimates, Surge 88% Y/Y

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Zacks Equity Research
·4 min read
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Group 1 Automotive, Inc. GPI reported adjusted earnings per share of $5.66 for fourth-quarter 2020, missing the Zacks Consensus Estimate of $5.84. This underperformance primarily stemmed from lower-than-anticipated gross profit from Used Vehicle Retail, Parts & Services and Finance & Insurance units. Nonetheless, the bottom line surged 88% year over year. The automotive retailer reported net sales of $2,990.2 million, lagging the Zacks Consensus Estimate of $3,022 million. The top-line figure also dipped 3.8% year over year.

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

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

Group 1 Automotive, Inc. price-consensus-eps-surprise-chart | Group 1 Automotive, Inc. Quote

Q4 Highlights

New-vehicle retail sales declined 5.1% from the prior-year quarter to $1,595.3 million and lagged the Zacks Consensus Estimate of $1,710 million. However, gross profit from the unit totaled $104.6 million, up 24.1% year over year.

Used-vehicle retail sales tailed off 2.5% from the year-ago quarter to $818.2 million. Used-vehicle wholesale sales scaled up 5.4% from the corresponding quarter last year to $86.2 million. Gross profit from used-vehicle retail sales and used-vehicle wholesale sales amounted $49.2 million and $2 million, missing the consensus mark of $55 million and $4 million, respectively.

For the Parts and Service business, the top line slid 4.8% from the year-ago period to $361.2 million and lagged the Zacks Consensus Estimate of $375 million. Gross profit from the segment summed $196.6 million, falling shy of the consensus mark of $202 million. Revenues from the Finance and Insurance business contracted 0.3% from the prior-year period to $129.3 million, missing the consensus mark of $131 million. Segmental gross profit of $129.3 missed the consensus estimate of $131 million.

Segments in Detail

For the reported quarter, revenues in the U.S. business segment totaled $2,420.1 million, almost unchanged from the year-ago level. The segment’s gross profit increased 5.4% year over year to $404.9 million. For the September-end quarter, retail new-vehicle, used-vehicle, and wholesale used-vehicle units sold were 30,610, 26,917 and 6,307, respectively.

Revenues dwindled 12.3% year over year to $501.9 million for the U.K. business segment. Gross profit summed $66.2 million, flat with the year-ago quarter. For the reported quarter, retail new-vehicle, used-vehicle, and wholesale used-vehicle units sold were 6,260, 6,926 and 4,134, respectively.

Revenues for the Brazil business segment plummeted 42.7% year over year to $68.2 million for the fourth quarter. The segment’s gross profit also plunged 23.6% year over year to $10.6 million. For the reported quarter, retail new-vehicle, used-vehicle and wholesale used-vehicle units sold were 1,650, 610 and 375, respectively.

Financial Position

During the quarter under review, the Zacks Rank #3 (Hold) company bought back 265,808 shares at an average price of $117.66 per share. Group 1 Automotive — which shares space with AutoNation AN, Lithia Motors LAD and Sonic Automotive SAH — had cash and cash equivalents of $87.3 million as of Dec 31, 2020, up from $23.8 million in the corresponding period of 2019. Long-term debt totaled $1,294.7 million as of Dec 31, 2020, down from $1,432.1 million recorded in the comparable period of 2019.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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