The profits of Sonic Automotive Inc. in the fourth quarter had increased as the demand for the new and used vehicles did better than the industry. When adjusted for one-time gains and losses, the net income of the No. 3 auto dealer group in the U.S. was $25.9 million compared with $16.5 million for the same quarterly period last year.
Its revenue increased by 12% from last year to $2.07 billion, slightly higher than the $2.06 billion that analysts had forecasted. The company said that its new-vehicle retail sales revenue rose by16% in the quarter to $1.1 billion. In a statement, Jeff Dyke, Sonic's executive vice president of operations, said that its new and used volume growth still surpasses industry averages as its team uses its “operating playbook strategy.”
He added that the team is focused on used car processes and this has led to double-digit volume growth for the past 11 straight quarters. Sonic then posted a 15% compound annual growth rate over the past 4 years. When one-time items are excluded, Sonic posted earnings of 43 cents a share, exceeding what analysts polled by Thomson Reuters I/B/E/S had predicted by five cents.
For the entire year, Sonic said it posted an adjusted net income of $80.8 million compared with 2010 earnings of $51.5 million. It recorded total revenue of $7.9 billion in 2011 versus $6.9 billion in 2010. It also provided an outlook for its 2012 earnings that, at the mid-point, exceeded the expectations of Wall Street. For 2012, Sonic anticipates U.S. new vehicle industry sales of around 13.5 million vehicles.
Because of this, Sonic expects that its 2012 earnings from continuing operations will be in the range of $1.55 to $1.65 a share. The mid-point of this range at $1.60 is higher than the $1.57 that analysts had expected. On the Automotive News list of the top 125 U.S. dealership groups, Sonic ranks No. 3 with new vehicle sales of 99,565 in 2010.