The 10-second takeaway
For the quarter ended June 30 (Q2), Sonic Automotive missed estimates on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue grew slightly. Non-GAAP earnings per share increased. GAAP earnings per share dropped significantly.
Margins shrank across the board.
Sonic Automotive chalked up revenue of $2.20 billion. The eight analysts polled by S&P Capital IQ predicted revenue of $2.31 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.50. The nine earnings estimates compiled by S&P Capital IQ forecast $0.52 per share. Non-GAAP EPS of $0.50 for Q2 were 8.7% higher than the prior-year quarter's $0.46 per share. (The prior-year quarter included -$0.03 per share in earnings from discontinued operations.) GAAP EPS of $0.16 for Q2 were 66% lower than the prior-year quarter's $0.47 per share. (The prior-year quarter included -$0.03 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 14.7%, 10 basis points worse than the prior-year quarter. Operating margin was 2.8%, 20 basis points worse than the prior-year quarter. Net margin was 0.4%, 90 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $2.27 billion. On the bottom line, the average EPS estimate is $0.51.
Next year's average estimate for revenue is $9.00 billion. The average EPS estimate is $2.01.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 86 members out of 121 rating the stock outperform, and 35 members rating it underperform. Among 49 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 40 give Sonic Automotive a green thumbs-up, and nine give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Sonic Automotive is hold, with an average price target of $25.44.
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