Sonic (SAH) Q2 Earnings Beat on High Retail New Vehicle Sales
Sonic Automotive, Inc. SAH registered second-quarter 2023 adjusted earnings per share of $1.83, outpacing the Zacks Consensus Estimate of $1.63. The bottom line, however, fell 25% from the $2.45 per share reported in the year-ago quarter.
Total revenues amounted to $3,652.9 million, marking an increase of 4%. The figure also surpassed the Zacks Consensus Estimate of $3,645 million.
Sonic Automotive, Inc. Price, Consensus and EPS Surprise
Sonic Automotive, Inc. price-consensus-eps-surprise-chart | Sonic Automotive, Inc. Quote
Quarter in Detail
In the reported quarter, revenues from retail new vehicles increased 20% year over year to $1,608.2 million, outpacing the consensus mark of $1,514 million. Gross profit totaled $141 million, falling 16% year over year, surpassing the consensus mark of $133 million. Same-store unit sales volume rose 12% to 26,844. Gross profit per unit dipped 25% to $4,986.
Revenues from the sales of used vehicles went down 10% from the prior-year level to $1,305.9 million, surpassing the consensus mark of $1,234 million. Gross profit totaled $40 million, declining 8.5%, beating the consensus mark of $34.93 million. Same-store unit sales decreased 10% to 24,737 in the quarter under review. Gross profit per unit declined 3% to $1,618.
The EchoPark segment reported quarterly revenues of $479 million, marking a 23% increase from the year-ago figure and lagging the consensus metric of $725 million. Its stores sold 13,732 used vehicle units, up 36% on a year-over-year basis. The segment reported a gross profit of $30.9 million, up 27% from the previous quarter on a year-over-year basis, lagging the consensus mark of $49.18 million.
Wholesale vehicle revenues fell 25% on a year-over-year basis to $91.5 million, missing the consensus mark of $93 million. Revenues from parts, services and collision repair were up 11% to $443.7 million, crossing the Zacks Consensus Estimate of $440 million. Finance, insurance and other revenues were $175.3 million, up 1% from the corresponding quarter of 2022 and topping the consensus estimate of $161 million.
Financials
Sonic had cash and cash equivalents of $119.7 million as of Jun 30, 2023, down from $229.2 million as of Dec 31, 2022. Long-term debt was $1,629.5 million, falling from $1,672.2 million recorded on Dec 31, 2022.
Selling, general and administrative expenses fell 3% year over year to $391.9 million in the quarter. The company’s board of directors approved the quarterly cash dividend of 29 cents, payable Oct 13, 2023, to all stockholders of record as of Sept 15, 2023. As of Jun 30, 2023, Sonic has $373.6 million remaining under its share buyback authorization.
Zacks Rank & Key Picks
SAH currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the auto space include Ford Motor Company F, Oshkosh Corporation OSK and Lear Corporation LEA. F sports a Zacks Rank #1 (Strong Buy) at present, and LEA and OSK each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for F’s 2023 sales implies year-over-year growth of 4.9%. The 2023 EPS estimate has been revised upward by 5 cents in the past seven days. The EPS estimate for 2024 has moved north by 5 cents in the past seven days.
The Zacks Consensus Estimate for LEA’s 2023 sales and earnings implies year-over-year growth of 16% and 75.4%, respectively. The EPS estimate for 2023 has moved north by 20 cents in the past seven days. The 2024 EPS estimate has moved up by 24 cents in the past seven days.
The Zacks Consensus Estimate for OSK’s 2023 sales and earnings implies year-over-year growth of 7.2% and 282.9%, respectively. The EPS estimate for 2023 has moved up by a cent in the past seven days. The 2024 EPS estimate has remained unchanged in the past seven days.
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