Group 1 swings to black in Q4

Group 1 Automotive Inc. swung to a net profit of $30.8 million in the fourth quarter from a year-earlier loss, as new vehicle sales decreased but gross profit per unit grew, the Houston auto retailer said today.Revenue was flat in the fourth quarter at $2.67 billion.“We are pleased with our overall performance in 2016 given the economic and political challenges we faced in each of our regions,” CEO Earl Hesterberg said in a statement.“The progress we delivered on both our cost structure during the fourth quarter and the reduction of our U.S. inventory, which ended the quarter with a 65-day supply, has us well positioned as we enter 2017.”For the year, revenue increased 2.4 percent to a record $10.89 billion, while net profit jumped 56 percent to $147.1 million.Group 1 shares fell 0.5 percent to close at $78.79. Special itemsThe year-earlier net loss of $33.4 million under U.S. generally accepted accounting principles was due to a noncash impairment charge of $72.8 million that Group 1 took against earnings to reflect the decline in the value of its chain of Brazilian dealerships.This year’s fourth quarter also saw several special aftertax charges. Those included:Noncash asset impairment charges of approximately $12.8 million;Severance costs of approximately $1.2 million; and, partially offsetting those, gains related toA settlement with an automaker of approximately $7.3 million; andReal estate and dealership transactions of approximately $300,000.Excluding those special items, Group 1’s adjusted net income rose 4.5 percent to $37.3 million.U.S. resultsIn the fourth quarter, revenue at the company’s U.S. operations fell 4.1 percent to $2.17 billion on lower new- and used-vehicle sales. U.S. gross profit eased 0.8 percent to $331.3 million.New-vehicle U.S. sales in the fourth quarter fell 11 percent to 31,779, while the average selling price per vehicle rose 4.5 percent to $38,010. Gross profit per new retail unit climbed 12 percent.On a same-store basis, new vehicle retail sales slid 7.1 percent vs. a 0.3 percent gain industrywide in the fourth quarter.Retail used-vehicle sales fell 2.7 percent to 24,866, while the average selling price rose 0.9 percent to $21,431. Gross profit per unit fell 5.4 percent.OverseasGroup 1 has its biggest operations in the U.S., followed by the U.K. and Brazil.In the U.K., fourth-quarter revenue increased 36 percent to $387.5 million. Gross profit climbed 33 percent to $44.4 million.Group 1’s Brazilian operations’ revenue slipped 6.4 percent to $115.2 million, but gross profit rose 4.5 percent to $13.4 million.

Group 1 swings to black in Q4

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