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Sonic Automotive (SAH) Q2 Earnings & Revenues Miss Estimates

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Sonic Automotive Inc. (SAH - Free Report) registered adjusted earnings per share of 40 cents in second-quarter 2017 compared with 50 cents in the year-ago quarter. Earnings missed the Zacks Consensus Estimate of 48 cents per share.

Total revenue in the reported quarter increased 1% to $2.41 billion. The figure, however, missed the Zacks Consensus Estimate of $2.44 billion.

Revenues from total new vehicles declined 0.9% year over year to $1.28 billion, while that from used vehicles increased 3.2% to $641.9 million in the quarter. Wholesale vehicle revenues rose 46.6% to $40.8 million. Revenues from parts, service and collision repair increased 2.8% to $361.1 million, while finance, insurance and other revenues grew 3.4% to $86.9 million.

Gross profit increased to $360.6 million in the reported quarter from $353.3 million a year ago. Selling, general and administrative expenses increased to $293.9 million from $277.2 million in the year-ago quarter. The company reported operating income of $42.2 million compared with $57 million in the year-ago quarter.

Dividend Update

The board of directors at Sonic Automotive announced a quarterly dividend of 5 cents per share. The dividend will be paid on Oct 13, 2017, to shareholders on record as of Sep15.

Business Update

During the quarter, the company’s EchoPark stores retailed 2,049 units, up over 80% year over year. Also, the company has plans of accelerated expansion of another 15 EchoPark stores.

During second-quarter 2017, the company opened a new Audi store in Pensacola, Florida and the sixth EchoPark store in Colorado.

2017 Outlook

Sonic Automotive expects adjusted earnings per share in 2017 in the band of $1.85–$1.95 per share.

Zacks Rank & Key Picks

Sonic Automotive currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked companies in the auto space are Allison Transmission Holdings (ALSN - Free Report) , Volkswagen AG and Daimler AG , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Transmission has expected long-term growth rate of 11%.

Volkswagen has expected growth rate of around 17.3% in the long run.

Daimler has expected long-term growth rate of 2.8%.

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