Sonic Automotive (SAH) Q1 Earnings Beat on EchoPark Strength – May 1, 2020

Sonic Automotive, Inc. (SAH Free Report) registered adjusted earnings per share of 40 cents in first-quarter 2020, beating the Zacks Consensus Estimate of 20 cents. Higher sales from the used vehicle unit led to outperformance. Moreover, the bottom line was a penny higher than 39 cents per share reported in the year-ago quarter on the back of solid performance from the EchoPark segment.

However, total revenues in the reported quarter amounted to $2,308 million, down 3.4% from the prior-year period. Further, revenues missed the Zacks Consensus Estimate of $2,325 million.

Key Takeaways

During the reported quarter, revenues from the sale of new vehicles fell 10% year over year to $959.5 million. Gross profit decreased to $45.4 million from $53.8 million recorded in the year-ago period.

Revenues from the sale of total used vehicles rose 3.6% from the prior-year quarter to $850 million. The metric also topped the consensus mark of $794 million. Unit sales rose from 38,463 a year ago to 40,024 in the quarter under review. While gross profit decreased 13.2% year over year to $32.1 million, the metric topped the Zacks Consensus Estimate of $31.7 million.

In the quarter under review, the EchoPark segment recorded revenues of $331.7 million, reflecting a 33% uptick from the year-ago figure. Its stores sold 13,986 units, up 27% on a year-over-year basis. The segment registered income of $2.1 million, unchanged from the year ago-quarter.

Wholesale vehicle revenues decreased 11.4% on a year-over-year basis to $48.5 million. Nonetheless, gross loss narrowed from $1.26 million in the year-ago quarter to $157,000.

Revenues from parts, services and collision repair fell 2% year over year to $334.7 million. Gross profit decreased $157.9 million in the quarter under review from $163.2 million in the year-ago period.

Finance, insurance and other revenues rose 8.5% on a year-over-year basis to $115.3 million.

Selling, general and administrative expenses increased to $282.2 million from $247.1 million in the year-ago quarter.

The board of directors announced a quarterly dividend of 10 cents per share, which will be paid on Jul 15, 2020 to shareholders of record on Jun 15, 2020. As of Apr 28, Sonic Automotive — whose peers include Lithia Motors (LAD Free Report) , AutoNation (AN Free Report) and Group 1 Automotive (GPI Free Report) — had $304.0 million of cash and cash equivalents on hand.

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