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Sonic (SAH) Beats Earnings, Misses Revenue Estimates in Q3

Sonic Automotive, Inc. SAH registered third-quarter 2020 adjusted earnings per share of $1.29 per share, which beat the Zacks Consensus Estimate of $1.14. Higher-than-expected sales from new and used vehicle units led to the outperformance. Precisely, used and vehicle sales came in at around $946 million and $1098.3 million, which surpassed the consensus mark of $933 million and $1,082 million, respectively. Moreover, the bottom line was higher than 66 cents per share reported in the year-ago quarter.

However, total revenues amounted to $2,548.5 million, down 5.6% from the prior-year quarter’s figure. Further, revenues missed the Zacks Consensus Estimate of $2,601 million.

Sonic Automotive, Inc. Price, Consensus and EPS Surprise

Sonic Automotive, Inc. price-consensus-eps-surprise-chart | Sonic Automotive, Inc. Quote

Key Takeaways

In the reported quarter, revenues from the sale of new vehicles fell 12.7% year over year to $1,098.3 million. Unit sales volume contracted 14.6% year on year to 23,875. Gross profit per unit surged 38.4% to $2,607.

Revenues from the sale of used vehicles increased 3.5% from the prior-year quarter’s level to $946 million. Unit sales contracted from 27,490in the prior-year quarter to 26,216 in the quarter under review. Gross profit per unit increased 3.9% year over year to $1,307.

For the quarter under review, the EchoPark segment recorded revenues of $385.3 million, reflecting a23.3% uptick from the year-ago figure. Its stores sold 15,127 units, up 14.5% on a year-over-year basis. Amid low gross profits and high SG&A expenses, the segment registered an income of $239,000, down 92.6% from the year ago-quarter’s levels.

Wholesale vehicle revenues rose 9.6% on a year-over-year basis to $56.5 million. Revenues from parts, services and collision repair fell 8.8% year over year to $320.9 million. Finance, insurance and other revenues came in at $126.8 million, almost flat with the year-ago levels.

Selling, general and administrative expenses fell to $257.1 million from $296.8 million in the year-ago quarter.The board of directors announced a quarterly dividend of 10 cents per share, which will be paid out on Jan 15, 2021 to shareholders of record on Dec 15, 2020. As of Sep 30, Sonic — whose peers include Lithia Motors LAD, AutoNation AN and Group 1 Automotive GPI — had $125.7 million of cash and cash equivalents on hand. Long-term debt summed $669.7 million. Sonic currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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AutoNation, Inc. (AN): Free Stock Analysis Report
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