Group 1 Automotive
GPI
reported fourth-quarter 2021 adjusted earnings per share of $9.43, beating the Zacks Consensus Estimate of $9.06. The outperformance can be attributed to the higher-than-anticipated gross profit from the company’s new-vehicle retail and used-vehicle retail segments. The bottom line increases from the prior-year quarter’s $5.66 per share, marking growth of 66.6%.
The automotive retailer registered net sales of $3,489.6 million, marginally beating the Zacks Consensus Estimate of $3,478.8 million. Also, the top line rose 16.7% from the year-ago quarter’s $2,990.2 million.
Q4 Highlights
New-vehicle retail
sales increased 8% from the prior-year quarter’s levels to $1,676.2 million. The figure missed the Zacks Consensus Estimate of $1,680 million. The gross profit from the unit totaled $194 million, soaring 91.5% year over year. The reported profit figure also surpassed the consensus mark of $155 million.
Used-vehicle retail
sales rose 40.9% from the year-ago period to $1,136.6 million. The sales figure also outpaced the consensus mark of $917 million. The gross profit from the unit summed $90.6 million, jumping 89% year over year. The reported profit figure also beat the consensus mark of $80 million.
Used-vehicle wholesale
sales climbed 5.6% from the corresponding quarter last year to $87.7 million but missed the consensus mark of $97 million. The gross profit from used-vehicle wholesale sales amounted to $4.8 million compared with the $1.7 million reported in the year-ago period. The reported figure, however, missed the consensus mark of $8.7 million.
In the
Parts and Service business
, the top line rose 24.5% from the year-ago quarter’s levels to $439 million. The revenue figure topped the Zacks Consensus Estimate of $437 million. The gross profit for the segment summed $232.2 million, climbing 20.5% year on year but missing the consensus mark of $240 million.
Revenues from the
Finance and Insurance business
improved 17.6% from the prior-year period’s levels to $150.1 million, topping the consensus mark of $132 million. The segmental gross profit was $150 million, ahead of the consensus mark of $132 million.
Segments in Detail
For the reported quarter, revenues in the U.S. business segment climbed 18% year on year to $2,854.7 million. The segment’s gross profit also scaled up 42.8% year over year to $578.1 million. During the reported quarter, the retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 29,028, 29,266 and 4,986, respectively.
In the reported period, revenues inched up 26.5% year over year to $634.9 million for the U.K. business segment. Also, the gross profit summed $93.1 million, up 40.6% from the fourth quarter of 2020. During the reported quarter, the retail new-vehicle, retail used-vehicle, and wholesale used-vehicle units sold were 6,545, 8,032 and 3,232, respectively.
During the quarter, the company announced the divestment plans of its Brazilian operations. Until the closure of its Brazilian operations, which is scheduled in the second quarter of 2022, operating results from the same will be reported as discontinued operations and excluded from continuing operations. Group 1 will, henceforth, not report Brazil as a separate segment and will only report the U.S. and U.K. segments.
Financial Position
Group 1 Automotive had cash and cash equivalents of $14.9 million as of Dec 31, 2021, down from $69 million in the corresponding period of 2020. Total debt totaled $2,035.7 million as of Dec 31, 2021, significantly up from the $1,336.6 million recorded in the comparable period of 2020.
During the current quarter, GPI repurchased 978,348 shares at an average price of $196.20 per common share for a total of $191.9 million. As of Dec 31, 2021, the company had 17.2 million common shares outstanding.
Zacks Rank & Other Key Picks
Currently, Group 1 has a Zacks Rank #2 (Buy).
Some other top-ranked players in the auto space are
Goodyear Tire
GT
and
Tesla
TSLA
, each sporting a Zacks Rank #1(Strong Buy) and
Genuine Parts
GPC
, carrying a Zacks Rank #2 currently. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Goodyear has an expected earnings growth rate of 51.7% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 1.1% upward over the past 60 days.
Goodyear’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. GT pulled off a trailing four-quarter earnings surprise of 228.5%, on average. The stock has also rallied 51.8% over a year.
Tesla has an expected earnings growth rate of 35.21% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 5% upward over the past 60 days.
Tesla’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 25.38%, on average. The stock has also rallied 11.5% over a year.
Genuine Parts has an expected earnings growth rate of 10.03% for the current year. The Zacks Consensus Estimate for earnings for the current year has been revised around 2.2% upward over the past 60 days.
Genuine Parts’ earnings beat the Zacks Consensus Estimate in all the trailing four quarters. GPC pulled off a trailing four-quarter earnings surprise of around 16%, on average. The stock has also rallied 26.8% over a year.
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