Key Predictions for Group 1 Automotive's (GPI) Q3 Earnings
Group 1 Automotive GPI is slated to release third-quarter 2021 results on Oct 28, before market open. The Zacks Consensus Estimate for the quarter’s earnings is pegged at $9.08 per share on revenues of $3.50 billion.
This automotive retailer delivered stellar earnings in the last reported quarter on higher-than-anticipated gross profit from all the segments of the company.
The company has surpassed estimates in three in three of the preceding four quarters and missed in one, the average surprise being 8.03%. This is depicted in the graph below:
Group 1 Automotive, Inc. Price and EPS Surprise
Group 1 Automotive, Inc. price-eps-surprise | Group 1 Automotive, Inc. Quote
Trend in Estimate Revisions
The Zacks Consensus Estimate for Group1 Automotive’s third-quarter earnings per share has significantly moved 66 cents north to $9.08 per share in the past 30 days. Moreover, this compares favorably with the year-ago quarter’s earnings of $6.97 per share, indicating a 30.27% surge, year on year. Further, the Zacks Consensus Estimate for quarterly revenues suggests a year-over-year rise of 15.26%.
Earnings Whispers
Our proven model predicts an earnings beat for Group 1 Automotive this time around. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the odds of an earnings beat. This has been elaborated below.
Earnings ESP: Group 1 Automotive has an Earnings ESP of +1.52%. This is because the Most Accurate Estimate is pegged 13 cents higher than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Group 1 Automotive, peers of which include AutoNation AN, Lithia Motors LAD and Penske Automotive PAG, currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Key Factors
With the sustained recovery of the economy from the pandemic blues, auto sales across the globe have managed to rebound, underlined by the rising momentum of new vehicle sales. Consequently, Group 1 Automotive’s quarterly results are likely to reflect the positive impact of solid contributions across all of the company’s segments.
For the quarter in discussion, the Zacks Consensus Estimate for revenues from the new vehicle retail sales, which has the highest contribution to the company’s revenues, is pegged at $1,755 million, indicating a jump from the $1,580.7 million reported in the year-ago period. Further, the consensus mark for the quarterly gross profit from the segment is pegged at $161 million, suggesting an increase from the $99 recorded in the prior-year quarter. This projected rise is likely to have aided the company’s performance during the quarter under review.
The consensus estimate for revenues from used-vehicle retail sales for the July-September period is pegged at $1,032 million, suggesting a rise from the $867.2 million recorded in third-quarter 2020. Further, the consensus mark for the quarterly gross profit from the segment is pinned at $94 million, calling for a surge from the $71 recorded in the prior-year period. This is anticipated to have fueled the top and bottom lines during the to-be-reported quarter.
The consensus mark for revenues from the used-vehicle wholesale sales for the September-end quarter is pinned at $102 million, suggesting a rise from the $86.7 million recorded in third-quarter 2020. In addition, the consensus mark for the quarterly gross profit from the segment is pinned at $9.7 million, calling for a climb from the $5.9 recorded in the year-earlier quarter.
The Zacks Consensus Estimate for quarterly revenues and profit from the parts and service segment is pinned at $402 million and $221 million, respectively, calling for a jump from the $375.6 million and $206 million reported in the prior-year period, respectively.
The Zacks Consensus Estimate for quarterly revenues from the Finance and Insurance business is pegged at $144 million, suggesting a rise from the $129.5 million recorded in third-quarter 2020.
During the quarter under review, Group 1 Automotive expanded its U.K. operations with the acquisition of nine businesses northeast of London, primarily in the region of East Anglia. These acquisitions are likely to have optimized its portfolio and boosted the firm’s revenues during the September-end quarter.
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