Sonic Automotive Inc.
) total revenue for the third quarter of 2013 rose 5.4% to $2.24
billion. However, revenues marginally missed the Zacks Consensus
Estimate of $2.29 billion. The year-over-year improvement in
revenues was driven by solid performance by most business
operations of the company.
Sonic Automotive recorded a tax gain in the reported quarter due
to the expiry of its 5% Convertible Senior Notes in 2011 and
2012. The company is calculating the effects of this gain and
will release the earnings per share and the net income of the
third quarter of 2013 after the evaluation is complete. The Zacks
Consensus Estimate for the third quarter earnings is 50 cents per
Of the total revenue, revenues from vehicle trade increased 5% to
$1.9 billion. Meanwhile, revenues from parts, service and
collision repair went up 7.8% to $309.6 million and from finance,
insurance and other services grew 6.8% to $68.7 million.
Revenues from new vehicles retail escalated 5.5% to $1.3 billion.
New vehicle retail unit sales increased 2.7% to 35,538 vehicles.
New vehicle gross margins were 5.7% compared with 5.6% in the
Revenues from used vehicles retail rose 6% to $559.8 million.
Used vehicle unit sales volume increased 3.8% to 27,632 vehicles.
Gross margin improved to 7% from 6.7% in the year-ago period.
Overall gross margin was 14.5% in the quarter compared with 14.3%
a year ago. Operating margin decreased to 2.6% from 2.7% a year
Sonic Automotive completed the acquisition of Murray Mercedes
Benz of Denver and Murray BMW of Denver in the third quarter of
2013. These acquisitions are expected to generate total annual
revenue of around $200 million. These stores will support the
existing platform of the company in Denver.
Charlotte, N.C. based Sonic Automotive is a Fortune 500 company.
It is one of the largest automotive retailers in the U.S. The
company currently operates 100 dealerships spread across 14
states and 25 major metropolitan markets. It represents about 25
different automotive brands with the majority of the dealerships
being luxury and import brands.
Sonic Automotive increased the lower end of its full year 2013
earnings per share guidance from continuing operations to range
between $1.96 and $2.03 from the earlier guidance of $1.93 and
$2.03. The improved forecast was based on the expectation that
earnings will lean toward the higher end of the guidance.
Currently, SAH retains a Zacks Rank #2 (Buy).
Other stocks that are performing well in the automotive retail
Asbury Automotive Group, Inc.
Lithia Motors Inc.
). Asbury Automotive carries a Zacks Rank #1 (Strong Buy), while
Lithia and AutoNation are Zacks Rank #2 (Buy) stocks.
ASBURY AUTO GRP (ABG): Free Stock Analysis
AUTONATION INC (AN): Free Stock Analysis
LITHIA MOTORS (LAD): Free Stock Analysis
SONIC AUTOMOTVE (SAH): Free Stock Analysis
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