On July 31, Group 1 Automotive (NYSE:GPI) announced second-quarter earnings for the period ended June 30.

  • Sales advanced 7.9% to $1.7 billion, primarily on the strength of new vehicle sales, which offset the decline in used vehicle wholesale revenue.
  • Improvements in the parts, service, finance, and insurance businesses were offset by declines in the new and used vehicle margins, causing the gross margin to fall 20 basis points.
  • During the quarter, management repurchased $13 million worth of common stock.
  • In the span of just one quarter, Group 1 Automotive's Motley Fool CAPS rating has spun out of control, plummeting from a rating of five out of five stars, to just two stars. Have an opinion about that? Get over to CAPS and share your thoughts with the rest of the community.

(Figures in millions, except per-share data.)

Income Statement Highlights

Q2 2007

Q2 2006

Change

Sales

$1,679.6

$1,557.0

7.9%

Net Profit

$24.2

$24.9

(2.6%)

EPS

$1.01

$1.0

1%

Diluted Shares

23.9

24.8

(3.8%)

Get back to basics with the income statement.

Margin Checkup

Q2 2007

Q2 2006

Change*

Gross Margin

15.4%

15.6%

(0.2)

Operating Margin

3.3%

3.6%

(0.3)

Net Margin

1.4%

1.6%

(0.2)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q2 2007

Q2 2006

Change

Cash + ST Invest.

$51.5

$77.5

(33.5%)

Accounts Rec.*

$257.5

$219.9

17.1%

Inventory

$861.6

$840.2

2.5%

Liabilities

Q2 2007

Q2 2006

Change

Accounts Payable

$136.4

$113.6

20.1%

Long-Term Debt

$500.9

$433.2

15.6%

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

The balance sheet reflects the company's health.

Cash Flow Highlights

Hey, who drove off with the cash flow statement?

Free cash flow is a Fool's best friend.

Related Foolishness:

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.

At the time of publication, Fool contributor Mike Cianciolo held no position in Group 1 Automotive.