Group 1 Automotive Peels Rubber: Fool by Numbers

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On April 26, automotive retailer Group 1 Automotive (NYSE: GPI) released first-quarter earnings for the period ended March 31.

• Revenue increased 7.4%, primarily thanks to growth in new and used vehicle sales and parts and service revenue, offset by a decline in used vehicle wholesale revenue.
• Gross margin decreased 50 bps on continuing weakness in the company's domestic stores and decrease in manufacturer dealer incentives and rebates realized.
• Group 1 has a five-star rating (the highest) in The Motley Fool's community-intelligence tool, CAPS. Competitors AutoNation (NYSE: AN) and Inside Value recommendation CarMax (NYSE: KMX) have three-star ratings. Interested in understanding why? Then come be a part of the CAPS community!

(Figures in millions, except per-share data)

Income Statement Highlights

	Q1 2007	Q1 2006	Change
Sales	$1,522.7	$1,417.6	7.4%
Net Profit	$17.4	$22.3	(21.8%)
EPS	$0.72	$0.91	(20.9%)
Diluted Shares	24.1	24.5	(1.5%)

Get back to basics with the income statement.

Margin Checkup

	Q1 2007	Q1 2006	Change*
Gross Margin	16.2%	16.7%	(0.5)
Operating Margin	2.9%	3.7%	(0.8)
Net Margin	1.2%	1.6%	(0.4)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets	Q1 2007	Q1 2006	Change
Cash + ST Invest.	$37.0	$35.2	5.1%
Accounts Rec.*	$262.0	$232.4	12.8%
Inventory	$851.2	$845.4	0.7%

Liabilities	Q1 2007	Q1 2006	Change
Accounts Payable	$135.0	$117.0	15.4%
Long-Term Debt	$490.1	$158.0	210.2%

*Receivables also include contracts in transit and net vehicle receivables.

The balance sheet reflects the company's health.

Cash Flow Highlights
Presenting an earnings release without a cash flow statement is like driving a car without insurance -- not a very good idea.

Free cash flow is a Fool's best friend.

Related Foolishness:

• AutoNation Gears Up  
• AutoNation Sputters  
• CarMax Crashes?

CarMax is a Motley Fool Inside Value selection.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.