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Group 1 Automotive (GPI) Q4 Earnings & Sales Beat Estimates

Zacks Equity Research

Group 1 Automotive, Inc. GPI reported adjusted earnings per share of $3.01 in fourth-quarter 2019, beating the Zacks Consensus Estimate of $2.76. The bottom line improved from the prior-year quarter’s $2.31. Results were aided by a stellar performance in the United States along with strong focus on used vehicles, service, finance & insurance businesses, and cost control, partially offset by weakness in the U.S. and U.K. market for new vehicles.

Revenues of $3.11 billion rose 6.94% year over year. Revenues beat the Zacks Consensus Estimate of $3.04 billion.

Reportedly, the company’s adjusted net income rose 28.54% year over year to $56.3 million.

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

Revenues from new-vehicle retail sales rose 6.9% to $1.68 billion. The same from used-vehicle retail sales improved 8.8% to $838.8 million. However, revenues from wholesale used-vehicle sales declined 5% to $81.8 million.

For the Parts and Service business, the top line improved 6.9% to $379.2 million. Revenues from the Finance and Insurance business rose 4.6% to $129.7 million.

Segments in Detail

Revenues in the U.S. business segment grew 6.8% year over year to $2.4 billion. The segment’s gross profit rose 9% year over year to $384.3 million. In the reported quarter, retail new-vehicle and used-vehicle, and wholesale used-vehicle units sold were 32,347; 29,717 and 7,034, respectively.

Revenues rallied 9.2% year over year to $572.5 million for the U.K. business segment. Gross profit was $66.5 million, marking a 2.4% increase from the fourth quarter of 2018. In the quarter, retail new-vehicle and used-vehicle, and wholesale used-vehicle units sold were 8,626; 7,837 and 4,661, respectively.

Revenues for the Brazil business segment grew 0.6% year over year to $119 million. However, the segment’s gross profit declined 5.1% year over year to $13.9 million. In the reported quarter, retail new-vehicle and used-vehicle, and wholesale used-vehicle units sold were 2,564; 1,117 and 548, respectively.

Financial Details

Group 1 Automotive’s cash and cash equivalents grew to $23.8 million as of Dec 31, 2019, from $15.9 million as of Dec 31, 2018. Long-term debt was $1,432.1 million as of Dec 31, 2019, marking an increase from $1,281.5 million recorded as of Dec 31, 2018. The long-term debt-to-capital ratio stands at 53.28%.

Share Repurchases

In fourth-quarter 2019, the company repurchased 163,484 shares at an average price per common share of $98.28, for $16.1 million. As of Feb 5, 2020, the company had remaining share repurchase authorization of $58.9 million.

Zacks Rank & Other Stocks to Consider

Group 1 Automotive currently carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the Auto-Tires-Trucks sector include Gentherm Inc THRM, Gentex Corporation GNTX and SPX Corporation SPXC, each carrying a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Gentherm has a projected earnings growth rate of 20.60% for the ongoing year. Its shares have gained 17.8% over the past year.

Gentex Corporation has an estimated earnings growth rate of 7.32% for 2020. The company’s shares have appreciated 54.6% in a year’s time.

SPX has an expected earnings growth rate of 8.09% for the current year. The stock has rallied 71.7% in the past year.

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