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Group 1 Automotive Inc. Reports Operating Results (10-Q/A)

December 02, 2011 | About:
10qk

10qk

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Group 1 Automotive Inc. (GPI) filed Amended Quarterly Report for the period ended 2011-09-30.

Group 1 Automotive Inc. has a market cap of $1.17 billion; its shares were traded at around $49.48 with a P/E ratio of 14.5 and P/S ratio of 0.2. The dividend yield of Group 1 Automotive Inc. stocks is 1%.

Highlight of Business Operations:

For the three months ended September 30, 2011, total revenues increased 7.4% from 2010 levels to $1.6 billion and gross profit improved 8.7% to $248.8 million. For the nine months ended September 30, 2011, total revenues increased 9.4% from 2010 levels to $4.5 billion and gross profit improved 8.3% to $714.7 million. Operating income rose for the three and nine months ended September 30, 2011 by 7.7% and 25.9%, respectively, from 2010 to $50.1 million and $143.7 million, respectively. Income before income taxes improved to $34.5 million for the third quarter of 2011, which was a 12.7% improvement over the same period from the prior year. For the first nine months of 2011, income before income taxes increased 52.3% to $98.7 million. For the three months ended September 30, 2011 and 2010, we realized net income of $21.5 million and $19.0 million, respectively, and diluted income per share of $0.91 and $0.79, respectively. For the nine months ended September 30, 2011 and 2010, we realized net income of $61.5 million and $39.7 million, respectively, and diluted income per share of $2.57 and $1.63, respectively. Our net cash flow provided by operations was $301.1 million for the nine months ended September 30, 2011, while our net cash flow used in operations was $52.2 million for the nine months ended September 30, 2010.

Our total Same Store revenues PRU increased 7.6% to $33,499 in the third quarter of 2011, due primarily to manufacturer price increases, and a mix shift to trucks from cars. In the third quarter of 2011, our Same Store retail new truck unit sales increased by 5.0% and our retail new car unit sales decreased by 15.3%, as compared with the same period in 2010. Our Same Store new vehicle gross profits improved 15.4% for the three months ended September 30, 2011 and our Same Store gross profit PRU increased by 24.2% to $2,212. This gross profit PRU improvement consisted of increases in predominantly all of the brands that we represent. As a result, our Same Store gross margin grew 90 basis points from 5.7% in the third quarter of 2010 to 6.6% in 2011.

For the nine months ended September 30, 2011, as compared to the corresponding period in 2010, Same Store new vehicle unit sales and revenues increased 0.7% and 6.5%, respectively. We achieved increases in Same Store unit sales of 25.1% and 2.8% in our domestic and luxury categories, respectively, partially offset by a decrease in Same Store unit sales of 6.0% in our import category. Our Same Store new vehicle retail revenues PRU improved 5.7% to $33,001 for the nine months ended September 30, 2011. Gross profit PRU improved 13.6% to $2,071 in the third quarter of 2011 from $1,823 during the same period in 2010, and, as a result, our gross margin grew 50 basis points from 5.8% to 6.3% for the nine months ended 2011, as compared to the same period in 2010.

In addition to factors such as general economic conditions and consumer confidence, our used vehicle business is affected by the level of manufacturer incentives on new vehicles, new vehicle financing, the number and quality of trade-ins and lease turn-ins, the availability of consumer credit and our ability to effectively manage the level and quality of our overall used vehicle inventory. For the three months ended September 30, 2011 our Same Store used retail revenues improved by 6.6% on a 2.6% increase in Same Store used retail units sales, as compared to the same period in 2010. Our average selling price PRU increased 3.9% in the three months ended September 30, 2011 to $20,152. For the nine months ended September 30, 2011, our Same Store used retail revenue improved by 6.7% on a 2.2% increase in Same Store used retail unit sales as compared to the same period in 2010, primarily as a result of an increase in our average selling price PRU of 4.4% to $20,001. The increases for both the three and nine month periods of 2011 reflect the overall strengthening in used vehicle valuations experienced in 2011, as compared to 2010.

Our Same Store parts and service revenues increased 2.2% for the three months ended September 30, 2011, driven primarily by a 6.8% increase in wholesale part sales and a 2.6% increase in customer-pay parts and service sales. We also generated a 7.4% increase in collision revenues. The increase in Same Store parts and service revenues were partially offset by a 6.3% decrease in warranty parts and service revenues related to the non-recurrence of the large Toyota recall in 2010. Similarly, for the nine months ended September 30, 2011, Same Store parts and service revenues increased 3.2%, as compared to the same period a year ago. The overall increase consisted of improvements in our wholesale parts business of 5.9%, our customer-pay parts and service revenues of 2.2%, and our collision revenues of 6.8%, as compared to the same period in 2010. Year to date, our warranty parts and service revenues increased 0.8%.

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