Group 1 Automotive (GPI) Beats On Q4 Earnings & Revenues

Group 1 Automotive Inc. (NYSE:GPI) reported adjusted earnings per share of $2.11 in fourth-quarter 2017, beating the Zacks Consensus Estimate of $1.87. The bottom line substantially improved from the prior-year quarter’s figure of $1.74. Results were aided by solid cost-control measures.

The company recorded an adjusted net income of $44.3 million compared with $37.3 million in the year ago. Revenues increased 9.2% year over year to $2.92 billion, surpassing the Zacks Consensus Estimate of $2.82 billion.

In 2017, adjusted earnings came in at $7.73, up 4.2% from that of 2016. Also, total revenues increased to $11.1 billion up 2.2 % from the prior-year figure.

Revenues from new vehicle retail sales increased 10.2% to $1.71 billion owing to a 6.4% rise in unit sales. The same from retailed used vehicles grew 8.9% to $709.1 million on a 5.4% increase in unit sales. However, the metric from used vehicle wholesale sales declined 8% to $91.8 million.

At the Parts and Service business, the top line improved 10.5% to $343.5 million. Also, the company’s Finance and Insurance business witnessed a 10 % gain in revenues to $114.7 million.

Gross profit was up 9.2% year over year to $425.7 million. Operating income rose 18.3% to $91 million as well.

Segment in Details

On a same-store basis, revenues in the U.S. business rose 3.9% to $2.4 billion. The segment recorded 6.9% growth in new vehicle retail sales to $1.29 billion and a 0.1% fall in total used vehicles’ retail sales to $532.2 million. While Parts and Service revenues increased 6.6%, Finance and Insurance revenues rose 5.3%.

Revenues, on a same-store basis, increased 7.4% year over year to $411.8 million at the U.K. business. Retail new vehicle sales improved 1.4% to $224.1 million and total used vehicle sales rallied 19.2% to $111.2 million. While Parts and Service revenues improved 11.9%, Finance and Insurance revenues rose 21.8%.

On a same-store basis, revenues in the Brazil business rose 15.7% year over year to $122.5 million in the reported quarter. New vehicle retail sales gained 16.7% to $82.5 million while total used vehicle sales rose 1.9% to $22.2 million. Parts and Service revenues increased 9.7% while Finance and Insurance revenues soared 33.2%.

Financial Details

Group 1 Automotive’s cash and cash equivalents increased to $28.8 million as of Dec 31, 2017 from $21 million as of Dec 31, 2016.

Share Repurchases

In 2017, Group 1 Automotive repurchased 649,298 outstanding shares. As of Feb 8, 2018, the company had $49.6 million remaining under the share repurchase authorization.

Zacks Rank & Key Picks

Group 1 Automotive sports a Zacks Rank #1 (Strong Buy).

Some other stocks worth considering from the auto space are Volkswagen (DE:VOWG_p) A.G. (OTC:VLKAY) , Oshkosh Corp. (NYSE:OSK) and Daimler A.G. (OTC:DDAIF) . Each of these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Volkswagen has an expected long-term growth rate of 18.7%. The stock has gained 8.3% in the last three months.

Oshkosh has an expected long-term growth rate of 14.5%. Shares of the company were up 11.2% in the last six months.

Daimler has an expected long-term growth rate of 5%. In the last six months, shares of the company have rallied 21%.

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