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Sonic Automotive (SAH) Q3 Earnings & Revenues Beat Estimates

Zacks Equity Research

Sonic Automotive, Inc. SAH registered adjusted earnings per share of 66 cents in third-quarter 2019, which beat the Zacks Consensus Estimate of 57 cents. Moreover, the bottom line rose from 36 cents reported in the year-ago quarter. The outperformance was driven by higher contribution from the used-vehicle unit and the EchoPark segment.

Total revenues in the reported quarter amounted to $2.7 billion, up from the prior-year quarter’s $2.4 billion. Additionally, revenues surpassed the Zacks Consensus Estimate of $2.6 billion.

Sonic Automotive, Inc. Price, Consensus and EPS Surprise

 

Sonic Automotive, Inc. Price, Consensus and EPS Surprise

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

Q3 Highlights

During the reported quarter, revenues from the sale of total new vehicles grew 1.9% year over year to $1.26 billion. Revenues from the sale of total used vehicles rose 22.6% to $914.2 million. Wholesale vehicle revenues improved 6.1% to $51.5 million on a year-over-year basis.

Revenues from parts, services and collision repair grew 2.6% year over year to $352 million. Finance, insurance and other revenues rose 29.3% on a year-over-year basis to $126.8 million.

In third-quarter 2019, gross profit grew to $386.8 million from $360.5 million in the year-ago quarter. Selling, general and administrative expenses rose to $296.8 million from $289 million in the year-ago quarter. The company recorded operating income of $65.2 million compared with $48.1 million in the year-ago quarter.

In the quarter under review, EchoPark stores sold 13,206 units, up 71.6% on a year-over-year basis.

Dividend Payment

The board of directors of Sonic Automotive announced a quarterly dividend of 10 cents per share. The dividend will be paid out on Jan 15, 2020, to shareholders of record as of Dec 13, 2019.

Outlook

The company anticipates favorable operating trends to continue in the fourth quarter. It plans to introduce the EchoPark brand to the California market. It also looks forward to continued execution of its EchoPark development strategies, omni-channel sales and other online initiatives.

Zacks Rank & Stocks to Consider

Sonic Automotive currently carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the Auto-Tires-Trucks sector are BRP Inc DOOO, currently sporting a Zacks Rank #1 (Strong Buy), and Lithia Motors, Inc LAD and America's Car-Mart, Inc CRMT, carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

BRP has an expected earnings growth rate of 18.4% for 2019. The company’s shares have gained 68.1% year to date.

Lithia Motors has an estimated earnings growth rate of 13.2% for 2019. Its shares have gained 102.1% year to date.

America's Car-Mart has an estimated earnings growth rate of 21.2% for 2019. Its shares have gained 24.2% year to date.

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