Sonic Q1 Results Better than Year Ago but Less than Wall St. Expected
DETROIT - Sonic Automotive, the third-largest U.S dealership group, today posted a quarterly profit that fell short of Wall Street estimates but beat year-ago results, Reuters reported.
First-quarter net income totaled $4.15 million or 8 cents per share. Revenue rose 13 percent to $1.56 billion.
"Not long ago, our stock price was below $1 per share, and there was a lot of uncertainty about our company," Sonic President Scott Smith said during a conference call with analysts.
On an operating basis and excluding one-time items, Sonic posted a profit of 14 cents a share, compared with analysts' expectations of 19 cents, according to Thomson Reuters I/B/E/S.
Adjusted earnings on continuing operations totaled 14 cents per diluted share, up from 10 cents a year ago.
The first-quarter results for Sonic, which was on the verge of bankruptcy less than a year ago, followed last year's fourth-quarter results, which saw the retailer get back into the black.
Last spring, the company restructured debts and was allowed to postpone a $90 million debt payment until 2012.
Also mentioned in the first-quarter report and during a conference call:
Overall new-vehicle retail volume was up 10 percent, and used-vehicle retail volume was up 25 percent for the first quarter compared with the same time last year. It was Sonic's fourth straight quarter of used-vehicle sales growth.
Service and parts revenue for the first quarter was up about 3 percent compared with the same quarter last year.
Sonic's forecast is for U.S. sales of 11 million vehicles this year -- and sales performed at that level during the first quarter. Some analysts are forecasting as high as 13 million light-vehicle sales this year.
Jeff Dyke, Sonic's executive vice president, said he is "cautiously optimistic" the industry will enjoy a slow recovery this year, although he would not predict 12 million.
Employee satisfaction is Sonic's No. 1 priority and one that the company says should lead to greater customer satisfaction. Overall employee turnover was a record low of just less than 25 percent on an annual basis.
Like No. 1 auto retailer AutoNation, Sonic saw double-digit sales growth in most regions, even Florida. Only a couple of markets reported single-digit growth.
Sonic Automotive, based in Charlotte, N.C., operates 145 franchises at 122 dealerships.
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