A month has gone by since the last earnings report for Sonic Automotive (SAH). Shares have lost about 2.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Sonic Automotive due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Sonic Automotive Q4 Earnings Beat, Revenues Miss
Sonic Automotive registered adjusted earnings per share of 76 cents in fourth-quarter 2018, beating the Zacks Consensus Estimate of 75 cents. However, the bottom line was lower than the fourth-quarter 2017 figure of 84 cents per share.
Total revenues in the reported quarter were $2.57 billion, down from the prior-year quarter figure of $2.67 billion. Further, revenues missed the Zacks Consensus Estimate of $2.69 billion.
During the reported quarter, revenues from the sale of total new vehicles decreased 11.2% year over year to $1.32 billion. Revenues from used vehicles rose 10.2% to $755.9 million. Wholesale vehicle revenues rose 22% to $49.9 million.
Revenues from parts, services and collision repair decreased 4.5% to $339.3 million while finance, insurance and other revenues rose 9.4% to $109.6 million.
In fourth-quarter 2018, gross profit decreased to $370.7 million from $384.1 million recorded a year ago. Selling, general and administrative expenses decreased to $273.9 million from $277.6 million in the year-ago quarter. The company reported operating income of $58.7 million compared with $77.2 million in the year-ago quarter.
In fourth-quarter 2018, EchoPark stores retailed 8,762 units, up 94.9% on a year-over-year basis.
2018 Results
For 2018, adjusted earnings per share were $1.79, down from the 2017 figure of $1.85.
Revenues were $9.95 billion in 2018, up from the 2017 figure of $9.87 billion.
Dividend & Share Repurchase
The board of directors of Sonic Automotive announced 67% rise in the quarterly dividend to 10 cents per share. The dividend will be paid on Apr 15, 2019, to shareholders of record as of Mar 15, 2019.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -46.38% due to these changes.
VGM Scores
Currently, Sonic Automotive has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Sonic Automotive has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Sonic Automotive, Inc. (SAH): Free Stock Analysis Report
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