Group 1 Automotive (GPI) Q4 Earnings Miss Estimates, Up Y/Y

Group 1 Automotive, Inc. (NYSE:GPI) reported adjusted earnings per share (EPS) of $2.31 in fourth-quarter 2018, missing the Zacks Consensus Estimate of $2.45. The bottom line improved from the prior-year quarter’s number of $2.11.

The company recorded net income of $30.7 million compared with $110.5 million in the year-ago quarter. Revenues of $2.9 billion declined 0.4% year over year.

Revenues from new-vehicle retail sales fell 5.3% to $1.57 billion. The same from retailed used vehicles grew 8.8% to $771.2 million. However, revenues from wholesale used-vehicle sales declined 6.2% to $86.1 million.

In the Parts and Service business, the top line improved 3.3% to $354.7 million. Also, the company’s Finance and Insurance business witnessed 8.1% rise in revenues to $124 million.

Gross profit inched up 1.5% year over year to $432.1 million. Operating income went down 18% to $74.7 million.

2018 Results

For 2018, adjusted earnings per share were $8.91, up 15.3% from 2017.

For 2018, total revenues reached a record level of $11.6 billion, up 4.3% from the 2017 figure.

Segments in Detail

On a same-store basis, revenues in the U.S. business segment fell 1.3% year over year to $2.22 billion. New-vehicle retail sales declined 5.2% on a year-over-year basis to $1.12 billion. Total used-vehicle sales rose 4.3% to $605.6 million. Parts and Service revenues increased 2.1% year over year. Finance and Insurance revenues rose 6% on a year-over-year basis.

Revenues, on a same-store basis, fell 8% year over year to $464.6 million in the U.K. business segment. Retail new-vehicle sales declined 18.1% to $218.6 million and total used-vehicle sales rose 4.6% to $150.2 million. Parts and Service revenues improved 5.1% while Finance and Insurance revenues fell 5.5%.

On a same-store basis, revenues in the Brazil business segment declined 12.5% year over year to $109.6 million in the reported quarter. New-vehicle retail sales fell 14.5% to $70.9 million and total used-vehicle sales decreased 12.2% to $24.9 million. Parts and Service revenues declined 6.5% while Finance and Insurance revenues rose 23.2%.

Financial Details

Group 1 Automotive’s cash and cash equivalents decreased to $15.9 million as of Dec 31, 2018, from $28.8 million as of Dec 31, 2017.

Share Repurchases

In fourth-quarter 2018, Group 1 Automotive repurchased 1,313,786 outstanding shares for $75.3 million.

For 2018, the company repurchased 2,849,652 shares for $181.7 million. These repurchases represented roughly 14% of its share float at the start of 2018. As of Feb 5, 2019, Group 1 Automotive has $49.7 million worth share repurchase authorization remaining.

Zacks Rank & Stocks to Consider

Group 1 Automotive currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the auto space are Dana Incorporated (NYSE:DAN) , Oshkosh Corporation (NYSE:OSK) and General Motors Company (NYSE:GM) , each currently carrying Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dana has an expected long-term growth rate of 2.9%. Over the past three months, shares of the company have risen 19.2%.

Oshkosh has an expected long-term growth rate of 11.3%. Over the past three months, shares of the company have surged 13.3%.

General Motors has an expected long-term growth rate of 8.5%. Over the past three months, shares of the company have risen 7.8%.

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