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Can AutoNation (AN) Pull Off a Surprise in Q2 Earnings?
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AutoNation (AN - Free Report) is slated to release second-quarter 2022 results on Jul 21, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and revenues is pegged at $5.95 per share and $6.87 billion, respectively.
The Zacks Consensus Estimate for AutoNation’s second-quarter earnings per share has remained unchanged over the past 30 days. The bottom-line projection implies a year-over-year jump of 23.2%. However, the Zacks Consensus Estimate for revenues suggests a year-over-year uptick of 1.6%.
The auto retailer came up with better-than-expected results in the last reported quarter on higher-than-anticipated used vehicle sales. The company surpassed earnings estimates in the trailing four quarters, with the average being 27.4%. Investors expect AN to maintain its beat streak this earnings season as well but our model doesn’t conclusively predict so.
The automotive retailer’s second-quarter results will reflect the rising average prices of both new and used vehicles. The Zacks Consensus Estimate for used and new vehicle retail prices per unit during the quarter under discussion is pegged at $29,527 and $48,872, indicating a rise from $25,882 and $44,429, respectively.
While an increase in prices is likely to have served as a major catalyst, declining year-over-year sales amid tight inventory is likely to have been a killjoy. The Zacks Consensus Estimate for total retail vehicle sales for the quarter to be reported is pegged at 144,018 units, indicating a decrease from 157,753 units in the year-ago period.
Meanwhile, increased focus on cost discipline is anticipated to aid the upcoming results. The company’s adjusted SG&A as a percentage of gross profit was 56.6% in the last reported quarter, representing a 610-basis point improvement year over year. The trend is expected to have continued in second-quarter 2022 as well.
The consensus mark for revenues from new-vehicle sales is pegged at $3,016 million, suggesting a decline from the year-ago levels of $3,428.3 million. However, gross profit from the unit is pegged at $372 million, implying an uptick from $321 million recorded in the year-ago quarter.
The gross profit estimate for finance and insurance, and parts and services is pegged at $371 million and $477 million, signaling year-over-year growth from $369 million and $433 million, respectively.
The consensus mark for revenues from used-vehicle sales is pegged at $2,390 million, suggesting a growth from the year-ago levels of $2,222.9 million. However, gross profit from the unit is pegged at $154 million, implying a decline from $203 million recorded in the second-quarter of 2021.
Higher year-over-year projected gross profit across all business operations except the used vehicle business is likely to aid the upcoming results.
What Does Our Model Say?
Our proven model doesn’t conclusively predict an earnings beat for AutoNation this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%. This is because the Most Accurate Estimate for earnings is in line with the Zacks Consensus Estimate.
Here are a couple of players from the auto space, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:
Driven Brand Holdings (DRVN - Free Report) has an Earnings ESP of +14.45% and a Zacks Rank #3.
The Zacks Consensus Estimate for Driven’s to-be-reported quarter’s earnings and revenues is pegged at 29 cents per share and $486 million, respectively. Encouragingly, DRVN surpassed earnings estimates in the last four quarters, with the average being 30.1%.
American Axle & Manufacturing (AXL - Free Report) has an Earnings ESP of +23.08% and a Zacks Rank #1.
The Zacks Consensus Estimate for American Axle’s to-be-reported quarter’s earnings and revenues is pegged at 13 cents per share and $1.37 billion, respectively. AXL surpassed earnings estimates in three of the last four quarters and missed once, with the average being 847.9%.
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Can AutoNation (AN) Pull Off a Surprise in Q2 Earnings?
AutoNation (AN - Free Report) is slated to release second-quarter 2022 results on Jul 21, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and revenues is pegged at $5.95 per share and $6.87 billion, respectively.
The Zacks Consensus Estimate for AutoNation’s second-quarter earnings per share has remained unchanged over the past 30 days. The bottom-line projection implies a year-over-year jump of 23.2%. However, the Zacks Consensus Estimate for revenues suggests a year-over-year uptick of 1.6%.
The auto retailer came up with better-than-expected results in the last reported quarter on higher-than-anticipated used vehicle sales. The company surpassed earnings estimates in the trailing four quarters, with the average being 27.4%. Investors expect AN to maintain its beat streak this earnings season as well but our model doesn’t conclusively predict so.
AutoNation, Inc. Price and EPS Surprise
AutoNation, Inc. price-eps-surprise | AutoNation, Inc. Quote
Factors at Play
The automotive retailer’s second-quarter results will reflect the rising average prices of both new and used vehicles. The Zacks Consensus Estimate for used and new vehicle retail prices per unit during the quarter under discussion is pegged at $29,527 and $48,872, indicating a rise from $25,882 and $44,429, respectively.
While an increase in prices is likely to have served as a major catalyst, declining year-over-year sales amid tight inventory is likely to have been a killjoy. The Zacks Consensus Estimate for total retail vehicle sales for the quarter to be reported is pegged at 144,018 units, indicating a decrease from 157,753 units in the year-ago period.
Meanwhile, increased focus on cost discipline is anticipated to aid the upcoming results. The company’s adjusted SG&A as a percentage of gross profit was 56.6% in the last reported quarter, representing a 610-basis point improvement year over year. The trend is expected to have continued in second-quarter 2022 as well.
The consensus mark for revenues from new-vehicle sales is pegged at $3,016 million, suggesting a decline from the year-ago levels of $3,428.3 million. However, gross profit from the unit is pegged at $372 million, implying an uptick from $321 million recorded in the year-ago quarter.
The gross profit estimate for finance and insurance, and parts and services is pegged at $371 million and $477 million, signaling year-over-year growth from $369 million and $433 million, respectively.
The consensus mark for revenues from used-vehicle sales is pegged at $2,390 million, suggesting a growth from the year-ago levels of $2,222.9 million. However, gross profit from the unit is pegged at $154 million, implying a decline from $203 million recorded in the second-quarter of 2021.
Higher year-over-year projected gross profit across all business operations except the used vehicle business is likely to aid the upcoming results.
What Does Our Model Say?
Our proven model doesn’t conclusively predict an earnings beat for AutoNation this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%. This is because the Most Accurate Estimate for earnings is in line with the Zacks Consensus Estimate.
Zacks Rank: AutoNation currently carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With the Favorable Combination
Here are a couple of players from the auto space, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:
Driven Brand Holdings (DRVN - Free Report) has an Earnings ESP of +14.45% and a Zacks Rank #3.
The Zacks Consensus Estimate for Driven’s to-be-reported quarter’s earnings and revenues is pegged at 29 cents per share and $486 million, respectively. Encouragingly, DRVN surpassed earnings estimates in the last four quarters, with the average being 30.1%.
American Axle & Manufacturing (AXL - Free Report) has an Earnings ESP of +23.08% and a Zacks Rank #1.
The Zacks Consensus Estimate for American Axle’s to-be-reported quarter’s earnings and revenues is pegged at 13 cents per share and $1.37 billion, respectively. AXL surpassed earnings estimates in three of the last four quarters and missed once, with the average being 847.9%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.