Group 1 Automotive Bags Ford Dealership - Analyst Blog

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Group 1 Automotive Inc. ( GPI ) revealed that it has acquired a Ford Motor ( F ) dealership located in Shreveport, La. The Rountree Ford Lincoln dealership is expected to generate $80 million in estimated revenues per year.

In Feb, the automotive retailer also acquired four Ford Motor dealerships in southwest of London in the U.K. They are located in the towns of Farnborough, Guildford, Wokingham and Bracknell.

The U.K. dealership is expected to generate about $177 million in estimated annual revenues. It will complement Group 1 Automotive's existing five BMW/MINI dealerships in Farnborough and other market areas south and southwest of London. The dealerships will trade under the "think Ford" brand name.

Group 1 Automotive strongly pursues dealership acquisition strategy. The automotive retailer owns franchises of many prominent automakers apart from Ford Motor, such as Volkswagen AG ( VLKAY ) and Toyota Motor Corporation ( TM ).

In the first quarter of the year, Group 1 Automotive acquired four franchises in the U.K and 22 franchises in Brazil, with combined annual revenues of $827.0 million. It also disposed a franchise in Calif. which generated annual revenues of $35.0 million in 2012.

Last month, GPI's board of directors approved a 6.7% increase in dividend to 16 cents per share for the first quarter of 2013 from 15 cents in the 2012-fourth quarter following its impressive earnings release on May 2. The increased dividend is payable on Jun 17 to stockholders of record as on Jun 3.

Group 1 Automotive raised dividend every year since it has resumed the payment in late 2010. Last year, the automotive retailer also raised dividend by a penny or 7.1% to 15 cents.

Group 1 Automotive posted a 19.6% rise in earnings per share to $1.16 in the first quarter of 2013 from 97 cents in the prior-year quarter and outpaced the Zacks Consensus Estimate of $1.04. Net income grew 26.5% to $29.2 million from $23.1 million in the first quarter of 2012.

Revenues increased 18% to $1.96 billion, beating the Zacks Consensus Estimate of $1.89 billion. The year-over-year improvement was driven by strong retail new vehicle and used vehicle unit sales as well as higher revenues from Finance and insurance business.

Gross profit increased 15.4% to $300.5 million from $260.4 million in the year-ago quarter. Operating income improved 8.6% to $58.6 million from $54.0 million in the first quarter of 2012.

Group 1 Automotive is one of the largest automotive retailers in the U.S., which provides 35 automotive brands. As of Mar 31, 2013, the company had 143 automotive dealerships, 182 franchises and 36 collision centers in the U.S., U.K and Brazil. Currently, it retains a Zacks Rank #2 (Buy).



FORD MOTOR CO (F): Free Stock Analysis Report

GROUP 1 AUTO (GPI): Free Stock Analysis Report

TOYOTA MOTOR CP (TM): Free Stock Analysis Report

VOLKSWAGEN-ADR (VLKAY): Get Free Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: F , GPI , TM , VLKAY

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