Group 1 Automotive (NYSE:GPI), Inc. GPI reported all-time record adjusted diluted earnings per share of $6.97 in third-quarter 2020, beating the Zacks Consensus Estimate of $6.56.
This outperformance stemmed from the higher-than-anticipated revenues from the used vehicle retail segment, and the parts and services segment. Moreover, the bottom line came in higher than the prior-year quarter’s $3.02 per share.
However, the automotive retailer reported net sales of $3,039.6 million, marginally lagging the Zacks Consensus Estimate of $3,043 million. Nonetheless, the top-line figure comes in 2.5% higher than the year-ago quarter’s $3,118.3 million.
Group 1 Automotive, Inc. Price, Consensus and EPS Surprise 
Group 1 Automotive, Inc. price-consensus-eps-surprise-chart | Group 1 Automotive, Inc. Quote
Q3 Highlights
New-vehicle retail sales declined 4.3% from the prior-year quarter to $1,580.7 million. In addition, the figure trailed the Zacks Consensus Estimate of $1,623 million. Used-vehicle retail sales edged down 0.3% from the year-ago quarter to $867.2 million. The sales figure, nevertheless, handily outpaced the consensus mark of $815 million. Used-vehicle wholesale sales inched up 1.5% from the corresponding quarter last year to $86.7 million, topping the consensus mark of $68 million. For the Parts and Service business, the top line slid 7.9% from the year-ago period to $375.6 million. However, the revenue figure surpassed the Zacks Consensus Estimate of $366 million. Revenues from the Finance and Insurance business grew 2% from the prior-year period to $129.5 million, in line with the consensus mark.
Segments in Detail
For the reported quarter, revenues in the U.S. business segment dropped 7.4% year on year to $2,244.6 million. The segment’s gross profit, nonetheless, increased 7.4% year over year to $415.7 million. During the September-end quarter, retail new-vehicle, used-vehicle, and wholesale used-vehicle units sold were 27,980, 27,694 and 6,159, respectively.
For the July-September period, revenues jumped 26.7% year over year to $740.8 million for the U.K. business segment. Gross profit summed $87.6 million, marking a 34.6% rise from the third quarter of 2019. During the reported quarter, retail new-vehicle, used-vehicle, and wholesale used-vehicle units sold were 10,689, 10,101 and 5,104, respectively.
Revenues for the Brazil business segment plummeted 51.1% year over year to $54.3 million during the third quarter. Further, the segment’s gross profit plunged 36.6% year over year to $8.6 million. In the reported quarter, retail new-vehicle, used-vehicle and wholesale used-vehicle units sold were 1,200, 552 and 282, respectively.
Financial Position & Dividend
Group 1 Automotive had cash and cash equivalents of $66.2 million as of Sep 30, 2020, up from $23.8 million as of Dec 31, 2019. Long-term debt totaled $1,307.8 million as of Sep 30, 2020, down from the $1,432.1 million recorded as of Dec 31, 2019.
On Oct 6, the company announced a new $200-million share-repurchase program. Management expects to reinstate a quarterly cash dividend following its board meeting in mid-November, and payable in mid-December.
Zacks Rank & Other Key Picks
Group 1 Automotive currently flaunts a Zacks Rank #1 (Strong Buy). Shares of the company have appreciated 6.1%, year to date, while the industry witnessed a rise of 16.7%.
Some other top-ranked stocks in the auto sector are Lear (NYSE:LEA) Corporation LEA, Autoliv (NYSE:ALV) Inc ALV and LCI Industries (NYSE:LCII) LCII, all of which sport a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
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