Sonic Automotive Inc (NYSE:SAH) shares surged 15.25% to $19.04, leading a rare surge in car dealer stocks, after the company printed its quarterly earnings figures.
Sonic Automotive Inc (NYSE:SAH) reported Q1 earnings per share of $0.31 and sees adjusted earnings per share for the year hitting $2.07 to $2.17 from continuing operations. Pre-owned units rose to 29,333, up 4.3% from the same period a year ago while quarterly total revenue dipped from $2.24 billion last year to $2.23 billion. Quarterly new vehicles revenue came in at $1.15 billion, short of estimates at $1.19 billion, but quarterly used vehicles revenue rose to $598.4 million versus estimates at $593.7 million.
“We are pleased with our operating results during the quarter. Strong performances in the fixed operations and the F&I areas drove the overall increase in gross profit to record levels. We continued to see gross profit compression in new vehicles and expect this to continue until inventory supply corrects to more normalized levels. The used vehicle market continues to demonstrate its resiliency despite the compression related to new vehicles,” shared Sonic’s EVP of Operations Jake Dyke in their press release.
The company also shared its plans to invest approximately $250 million in land and facilities this year. “In addition to the real estate and construction activities related to EchoPark®, we are aggressively replacing leased properties with image-compliant facilities on owned land. We anticipate investing approximately $250 million in land and facilities in the current year funded by mortgages and cash generated through operations,” Sonic Automotive Inc (NYSE:SAH) CEO B. Scott Smith explained. “These hard assets are the cornerstones of our long-term plan.”
“The expansion in Denver is on schedule and we anticipate opening two additional stores in the second quarter of 2016 and another by the end of the year. We are also happy to announce we will be introducing the EchoPark® brand to the Texas and Carolinas markets in 2017 where we have been actively accumulating property,” Dyke added.
Sonic Automotive Inc (NYSE:SAH) is an automotive retailer in the United States. It provides services such as sales of both new and used cars and light trucks, replacement parts, performance of vehicle maintenance, manufacturer warranty repairs and collision repair.
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