Tag Archive | "quarterly earnings"

Group 1’s F&I Per-Copy Average Jumps $65 in the U.S. Market


HOUSTON — Group 1 Automotive, an international dealer group with outlets in the United States, the United Kingdom and Brazil, raised its consolidated F&I profit per-copy average by $27 to $1,352. The group’s U.S.-based F&I operations continued to live $1,500 per copy.

In the United States, the group’s F&I operations averaged $1,515 in F&I per vehicle retailed (PVR), a $65 improvement over last year. Its consolidated average was held down by the $54 and $238 PVR drops in the United Kingdom and Brazil, where the average stood at $693 and $399, respectively.

For the first nine months of the year, the group’s per-copy average for its U.S.-based F&I operations was $1,529, up $79 from the first nine months of 2014.

The PVR increase in Group 1’s U.S. market was driven, in part, by an increase in penetration rates for most of the group’s F&I product offerings. Officials also listed consolidation of its lender base, the availability of consumer financing, including improved subprime financing, and integrating compliance, training and benchmarking to create a transparent customer experience as other drivers.

“We are very pleased with where we are and we work every day to improve the underperforming stores and increase our product penetrations,” said Peter DeLongchamps, vice president of financial services and manufacturer relations. “So that’s just been a lot of hard work by my team and we are delighted with the results.”

Product acceptance rates varied in the group’s three markets, with service contracts leading the way in every one. In the United States, service contracts penetrated at a rate of 40%, while GAP, prepaid maintenance and the group’s paint sealant product posting acceptance rates of 28%, 12% and 19%, respectively.

The group posted a 10.8% increase in U.S. same-store F&I gross profit, which totaled $97 million, while total F&I revenue grew by 12% from a year ago.

For the quarter, the group posted record earnings and revenue. Total revenue increased 6.6% to an all-time quarterly record of $2.8 billion, while total gross profit grew 6.3% to an all-time quarter record of $398.4 million. The group also reported record adjusted net income of $46 million, a 15.7% increase from a year ago.

All three of the group’s markets sold a combined 47,126 new vehicles and 32,491 used vehicles on a same-store basis during the third quarter. Its U.S. operations accounted for 37,132 of the new vehicles sold and 26,756 of the used vehicles sold. All three markets experienced double-digit increase in used-vehicle sales, the U.K. market realizing the largest increase during the period compared to a year ago.

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AutoNation Posts $146 Q3 Increase in F&I Per-Copy Average


FORD LAUDERDALE, Fla. — Strong performances in all of AutoNation Inc.’s business sectors — particularly the group’s F&I operations, which continued to live above $1,500 per copy during the period — drove record third-quarter results for the nation’s largest dealer group.

While F&I accounted for 4.3% of the company’s $5.1 billion in same-store revenue, F&I generated 27.6%, or $222 million, of AutoNation’s $803 million total same-store gross profit for the quarter. That’s up $26 million over the previous year.

The group’s F&I operations also increased its F&I profit per vehicle unit (PVR) average by $146 from a year ago, with the department averaging $1,549 per copy.

“We are pleased with our new-vehicle PVR performance for the quarter,” said Bill Berman, COO of AutoNation, during the group’s Oct. 28 third-quarter investor call. “We expect a sequential increase in PVRs in the $200 range due to the seasonal mix toward Premium Luxury.”

The company posted total revenue of $5.4 billion, up from $4.9 billion in the year-ago quarter. Net income from continuing operations rose 11% from a year ago to $118.5 million.

New-vehicle sales increased 5% from a year ago to 87,407 units, with gross profit on a per vehicle retail basis staying relatively flat from last year’s $1,877 average.

Used vehicles, however, did not see the same improvement thanks to the open safety recall policy the group announced in early September. It led to a slight 275-unit drop in sales during the quarter, with used-vehicle sales totaling 55,875 units. Gross profit on a per vehicle retail basis decreased 7% from a year ago to $1,509.

“… We set an auto retail industry standard and decided not to sell, lease or wholesale any new or used vehicle that has an open recall,” Berman said. “As of September, 30.6% of our inventory, which represents less than 2% of our new-vehicle inventory and approximately 16% of our used-vehicle inventory, was not available for sale due to open recalls.”

“Our used-vehicle sales were slowed by our recall policy and we expect to see an impact in the fourth quarter as well,” he added.

Officials also commented on AutoNation’s July decision to drop TrueCar as one of its third-party lead providers, with Berman noting that moving away “from less profitable providers” helped offset new-vehicle PVR pressures.

“New-vehicle PVRs from our self-generated sales, including Customer Financial Services, are approximately $800 higher than new vehicle PVRs from third-party sales,” he said.

In the third quarter, the AutoNation Express website generated more than 25% of the company’s unit sales. Sales from third-party lead websites represent less than 9% of the company’s unit sales, officials said.

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AutoNation Posts $146 Q3 Increase in F&I Per-Copy Average


FORD LAUDERDALE, Fla. — Strong performances in all of AutoNation Inc.’s business sectors — particularly the group’s F&I operations, which continued to live above $1,500 per copy during the period — drove record third-quarter results for the nation’s largest dealer group.

While F&I accounted for 4.3% of the company’s $5.1 billion in same-store revenue, F&I generated 27.6%, or $222 million, of AutoNation’s $803 million total same-store gross profit for the quarter. That’s up $26 million over the previous year.

The group’s F&I operations also increased its F&I profit per vehicle unit (PVR) average by $146 from a year ago, with the department averaging $1,549 per copy.

“We are pleased with our new-vehicle PVR performance for the quarter,” said Bill Berman, COO of AutoNation, during the group’s Oct. 28 third-quarter investor call. “We expect a sequential increase in PVRs in the $200 range due to the seasonal mix toward Premium Luxury.”

The company posted total revenue of $5.4 billion, up from $4.9 billion in the year-ago quarter. Net income from continuing operations rose 11% from a year ago to $118.5 million.

New-vehicle sales increased 5% from a year ago to 87,407 units, with gross profit on a per vehicle retail basis staying relatively flat from last year’s $1,877 average.

Used vehicles, however, did not see the same improvement thanks to the open safety recall policy the group announced in early September. It led to a slight 275-unit drop in sales during the quarter, with used-vehicle sales totaling 55,875 units. Gross profit on a per vehicle retail basis decreased 7% from a year ago to $1,509.

“… We set an auto retail industry standard and decided not to sell, lease or wholesale any new or used vehicle that has an open recall,” Berman said. “As of September, 30.6% of our inventory, which represents less than 2% of our new-vehicle inventory and approximately 16% of our used-vehicle inventory, was not available for sale due to open recalls.”

“Our used-vehicle sales were slowed by our recall policy and we expect to see an impact in the fourth quarter as well,” he added.

Officials also commented on AutoNation’s July decision to drop TrueCar as one of its third-party lead providers, with Berman noting that moving away “from less profitable providers” helped offset new-vehicle PVR pressures.

“New-vehicle PVRs from our self-generated sales, including Customer Financial Services, are approximately $800 higher than new vehicle PVRs from third-party sales,” he said.

In the third quarter, the AutoNation Express website generated more than 25% of the company’s unit sales. Sales from third-party lead websites represent less than 9% of the company’s unit sales, officials said.

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GM’s Profits Rise to $945 Million in Q1


DETROIT – General Motors on Thursday reported net income of $945 million for the first quarter of 2015. That compares to net income of $108 million for the Detroit automaker in the comparable period one year ago, reported MLive.

GM’s earnings before interest and taxes increased to $2.1 billion, compared with an EBIT of $500 million in the first quarter of 2014.

The company had $1.3 billion in recall-related pre-tax costs and $0.3 billion in restructuring costs in the year-ago period, compared with just $0.1 billion in restructuring costs in first quarter of this year.

Revenues dipped to $35.7 billion in the first quarter of this year from $37.4 billion in the year-ago quarter.

“Our results in the first quarter provide a solid foundation to achieve our financial commitments for the year,” GM CEO Mary Barra said in a release. “Continued execution of our plan, including our capital allocation framework, will drive profitable growth, return on invested capital and shareholder value.”

By region, the company handily improved its EBIT in North America to $2.2 billion in the first quarter, after incurring that $1.3 billion costs there in the year-ago quarter. GM narrowed its EBIT loss in Europe to $200 million, compared with $300 million in the comparable period. Its EBIT in South America was flat at about a $200 million loss.

“Key vehicles like our recently launched full and mid-size trucks, and our cost discipline helped us deliver a solid quarter,” Chuck Stevens, GM executive vice president and chief financial officer, said in a release. “We continue to take decisive actions to address issues head-on and to drive the company to generate strong results.”

Last month, GM announced a $5 billion stock buy-back program. The automaker said Thursday it had since repurchased 19.4 million shares.

Separately, on Tuesday GM announced a 2 percent rise in vehicle sales to 2.4 million units sold globally in the first quarter. Sales in North America were up 6 percent, in China they rose 9 percent and Opel/Vauxhall’s sales grew 3 percent in Europe.

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Lithia’s Drop in New-Vehicle Gross Per Unit Offset by Q1 F&I Performance


MEDFORD, Ore. — Lithia Motors’ F&I operations realized a $52 increase in F&I profit per vehicle retailed, which settled in at $1,233 in the first quarter of 2015.

The group’s F&I performance, coupled with the $97 increase in used-vehicle gross profit per vehicle retailed ($2,602), helped the 130-store dealer group offset lower new-vehicle gross profit per unit, which fell $90 to $2,160.

“In the first quarter, the blended overall gross profit per unit was $3,646 compared to $3,599 last year, or an increase of $57 …,” said Bryan Deboer, Lithia’s president and CEO, during the group’s quarterly investor call on Tuesday. “While we continue to see lower new-vehicle gross profit per unit, this was more than offset by improvement in used-vehicle gross profit per unit and F&I per vehicle.”

Lithia Motors not only posted its best quarterly results since 2006, it also realized its highest first quarter adjusted net income in company history, which rose from $27.1 million in the year-ago period to $36.9 million. On per-share basis, earnings increased 35% from a year ago to $1.38 per share.

Revenue increased 66% from a year ago to approximately $1.8 million, with the group realizing double-digit increases in all of its four business lines on a same-store basis.

Total sales increased 11%, while new-vehicle revenues increased 11.3% on a same-store basis to $639,501. The average selling price increased 3%, while unit sales increased 8.5% from a year ago to 18,567 units.

Used-vehicle revenues increased 11.1% to $333,300, while the average selling price increased 4%. The dealer group also retailed 6% more used vehicles than a year ago, with the group selling 0.9 used vehicles for every new-vehicle sold.

Revenue from service, body and parts increased 11.1% from a year ago to $1.2 million, with revenues from customer pay and warranty-related work increasing 19% and 31%, respectively. Wholesale parts revenues also increased 5%, while body shop revenues showed a slight decrease of 3%.

“We delivered the best first quarter earnings in our company’s history, and the second best quarterly earnings ever,” Deboer noted. “For the fourth consecutive quarter, we achieved double-digit growth in same-store sales in all business lines. We remain focused on capturing additional market share, improving existing store results, and the continued success, integration and growth of DCH and actively seeking accretive acquisitions.”

Last June, Lithia agreed to buy DCH Auto Group, a 27-store operation with stores in California, New York and New Jersey. The acquisition made Lithia the fifth largest dealer group by store count.

“We believe that the integration of DCH has gone very smoothly,” Deboer said on Tuesday, noting that the group continues to explore other acquisitions.

“We are not solely looking at $500 million or $1 billion acquisition,” he added. “We’re still looking at our typical strategies where we buy $50 million to $70 million store size. And there is a pretty active market in that arena both in our exclusive markets and now in the metropolitan market.”

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AutoNation Posts Record Fourth Quarter


FORT LAUDERDALE, Fla. — Stepping down after 15 years as president and COO, Mike Maroone said during the company’s quarterly investor call this week that he was “very optimistic” about AutoNation’s future. The dealer group realized record earnings per share from continuing operations in the fourth quarter 2014 and its strongest year in company history.

“We are extremely pleased with our fourth quarter performance, where we delivered revenue and gross profit growth across the business, an exceptional 4.5% operating margin, an all-time record quarterly and annual EPS, and the 17th consecutive quarter of double-digit EPS growth,” said Maroone.

AutoNation reported 2014 fourth quarter net income from continuing operations of $117 million, or $1.02 per share — a 23% improvement on a per-share basis from the prior year. The dealer group’s revenue for the quarter totaled $5 billion, an increase of 12%, driven by strong performance in all of the company’s business sectors, including F&I, new vehicles, used vehicles, and parts and service.

“Revenue for the full year was $19.1 billion, up 9% over the prior year,” added Mike Jackson, AutoNation’s chairman and CEO, who will take over as president when Maroone steps down on April 1. “Operating income for the full year was $821 million, an increase of 11% over the prior year.”

In the fourth quarter, AutoNation’s retail new-vehicle unit sales increased 11% overall and 9% on a same-store basis, while retail used-vehicle unit sales increased 9% overall and 7% on a same-store basis. For full year 2014, AutoNation’s retail new-vehicle unit sales increased 9% overall and 7% on a same-store basis, while retail used-vehicle unit sales increased 5% overall and 4% on a same-store basis.

During the call, Jackson also touched on the dealer group’s digital strategy, including the December launch of AutoNation Express, the dealer group’s digital storefront.

“Our investment in AutoNation Express will increase significantly in 2015 as compared to 2014,” Jackson noted. “That includes investment in the brand. It includes investment in IT capabilities and it includes investment in the store as far as features that have to be in the store.”

AutoNation Express is part of the dealer group’s strategy to turn its websites from informational to transactional. Starting in December, customers of several AutoNation stores located in Florida were able to use their credit cards to reserve the vehicle they wanted to purchase.

“Its benefits are down the road,” Jackson noted. “… The next piece of the puzzle is transactional websites and traffic to our websites. Traffic to our website is growing at double-digit, significant double-digit rates. Our own websites now generate more business than all the third parties combined. So there is significant progress. But if I look at the level of investment relative to those factors, I would say we are still very much in investment period. And I would say that will certainly be for all of 2015.”

AutoNation announced its intention to cut spending on third-party lead providers back in April, officials saying the group could achieve a better handoff between its sites and stores without middlemen like AutoTrader and TrueCar.

“As far as my conviction, are we on the right course or not?” Jackson asked. “I am 100% convinced … that the strategy we are pursuing, over time, will be a sustainable competitive advantage for AutoNation, which is one of the hardest things to do in business.”

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