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Why Is Sonic Automotive (SAH) Up 9.1% Since Last Earnings Report?
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It has been about a month since the last earnings report for Sonic Automotive (SAH - Free Report) . Shares have added about 9.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Sonic Automotive due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Sonic Automotive Q2 Earnings Top, Sales Miss Estimates
Sonic Automotive registered second-quarter 2020 adjusted earnings per share of 64 cents, which beat the Zacks Consensus Estimate of 31 cents. Higher-than-expected sales from the used vehicle unit led to outperformance. Precisely, used vehicle sales came in at around $809 million, surpassing the consensus mark of $542 million. Moreover, the bottom line was higher than 62 cents per share reported in the year-ago quarter on the back of solid performance from the EchoPark segment.
However, total revenues for the reported quarter amounted to $2,111.9 million, down 19.2% from the prior-year period. Further, revenues missed the Zacks Consensus Estimate of $2,227 million.
Key Takeaways
For the reported quarter, revenues from the sale of new vehicles fell 25.3% year over year to $900 million. Gross profit decreased to $45.4 million from $56.4 million recorded in the year-ago period.
Revenues from the sale of used vehicles declined 8.7% from the prior-year quarter to $808.8 million. Unit sales contracted from 28,871 a year ago to 23,973 in the quarter under review. Gross profit decreased 18.8% year over year to $30.4 million.
For the quarter under review, the EchoPark segment recorded revenues of $315.3 million, reflecting an 8.1% uptick from the year-ago figure. Its stores sold 14,661 units, up 2.7% on a year-over-year basis. The segment registered an income of $2.57 million, up 52.2% from the year ago-quarter.
Wholesale vehicle revenues decreased 34.8% on a year-over-year basis to $28.5 million. Nonetheless, gross loss narrowed from $670,000 in the year-ago quarter to $357,000.
Revenues from parts, services and collision repair fell 27.4% year over year to $252 million. Gross profit decreased to $124.5 million for the quarter under review from $170.7 million in the year-ago period.
Finance, insurance and other revenues slid 10.2% on a year-over-year basis to $80.4 million.
Selling, general and administrative expenses decreased to $230.4 million from $294.5 million in the year-ago quarter.
The board of directors announced a quarterly dividend of 10 cents per share, which will be paid on Oct 15, 2020 to shareholders of record on Sep 15, 2020. As of Apr 28, Sonic had $115.7 million of cash and cash equivalents on hand.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 47.27% due to these changes.
VGM Scores
Currently, Sonic Automotive has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Sonic Automotive has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Why Is Sonic Automotive (SAH) Up 9.1% Since Last Earnings Report?
It has been about a month since the last earnings report for Sonic Automotive (SAH - Free Report) . Shares have added about 9.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Sonic Automotive due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Sonic Automotive Q2 Earnings Top, Sales Miss Estimates
Sonic Automotive registered second-quarter 2020 adjusted earnings per share of 64 cents, which beat the Zacks Consensus Estimate of 31 cents. Higher-than-expected sales from the used vehicle unit led to outperformance. Precisely, used vehicle sales came in at around $809 million, surpassing the consensus mark of $542 million. Moreover, the bottom line was higher than 62 cents per share reported in the year-ago quarter on the back of solid performance from the EchoPark segment.
However, total revenues for the reported quarter amounted to $2,111.9 million, down 19.2% from the prior-year period. Further, revenues missed the Zacks Consensus Estimate of $2,227 million.
Key Takeaways
For the reported quarter, revenues from the sale of new vehicles fell 25.3% year over year to $900 million. Gross profit decreased to $45.4 million from $56.4 million recorded in the year-ago period.
Revenues from the sale of used vehicles declined 8.7% from the prior-year quarter to $808.8 million. Unit sales contracted from 28,871 a year ago to 23,973 in the quarter under review. Gross profit decreased 18.8% year over year to $30.4 million.
For the quarter under review, the EchoPark segment recorded revenues of $315.3 million, reflecting an 8.1% uptick from the year-ago figure. Its stores sold 14,661 units, up 2.7% on a year-over-year basis. The segment registered an income of $2.57 million, up 52.2% from the year ago-quarter.
Wholesale vehicle revenues decreased 34.8% on a year-over-year basis to $28.5 million. Nonetheless, gross loss narrowed from $670,000 in the year-ago quarter to $357,000.
Revenues from parts, services and collision repair fell 27.4% year over year to $252 million. Gross profit decreased to $124.5 million for the quarter under review from $170.7 million in the year-ago period.
Finance, insurance and other revenues slid 10.2% on a year-over-year basis to $80.4 million.
Selling, general and administrative expenses decreased to $230.4 million from $294.5 million in the year-ago quarter.
The board of directors announced a quarterly dividend of 10 cents per share, which will be paid on Oct 15, 2020 to shareholders of record on Sep 15, 2020. As of Apr 28, Sonic had $115.7 million of cash and cash equivalents on hand.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 47.27% due to these changes.
VGM Scores
Currently, Sonic Automotive has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Sonic Automotive has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.