Asbury (ABG) Q4 Earnings Miss Expectations, Decline Y/Y

Core Insights - Asbury Automotive Group (ABG) reported adjusted earnings of $7.12 per share for Q4 2023, a decrease of 21.9% year over year, missing the Zacks Consensus Estimate of $7.74 due to lower-than-expected sales in used-vehicle and parts and service segments [1] - Total revenues for the quarter were $3.81 billion, reflecting a 3% year-over-year increase and surpassing the Zacks Consensus Estimate of $3.77 billion [1] Segment Details - New-vehicle revenues increased by 11% year over year to $2.06 billion, exceeding the Zacks Consensus Estimate of $1.96 billion, while gross profit from this segment was $171 million, down 13.6% from the prior year but above the estimate of $161 million [2] - Used-vehicle revenues fell by 7% year over year to $1.07 billion, missing the Zacks Consensus Estimate of $1.09 billion, with gross profit at $54 million, a decline of 20.6% and below the estimate of $62 million [2] - Finance and insurance business net revenues were $171.2 million, down 10% year over year but exceeding the Zacks Consensus Estimate of $157 million, with gross profit rising 5.8% year over year to $163 million, surpassing the estimate of $153 million [2] - Parts and service revenues decreased by 1% year over year to $513.4 million, missing the Zacks Consensus Estimate of $556 million, with gross profit falling 2.1% to $285 million, also below the estimate of $301 million [3] Other Financial Metrics - Adjusted selling, general & administrative expenses as a percentage of gross profit rose to 61.5%, an increase of 442 basis points year over year [4] - As of December 31, 2023, the company had cash and cash equivalents of $45.7 million, down from $235.3 million a year earlier, and long-term debt decreased to $3.21 billion from $3.3 billion [4] - During the quarter, Asbury repurchased 246,000 shares for $47 million, with $203 million remaining under its share repurchase authorization as of December 31, 2023 [4] Market Position - ABG currently holds a Zacks Rank 3 (Hold) [5] - Competitors in the auto space include Modine Manufacturing Company (Zacks Rank 1), NIO Inc. (Zacks Rank 2), and Oshkosh Corporation (Zacks Rank 2) [5] - The Zacks Consensus Estimate for Modine's 2024 sales and earnings suggests year-over-year growth of 4% and 67.2%, respectively [5] - NIO's 2023 sales are expected to grow by 10.4% year over year, with EPS estimates for 2024 improving by 7 cents [5] - Oshkosh's 2024 sales and earnings estimates suggest year-over-year growth of 6.7% and 4%, respectively, with EPS estimates improving by 16 cents and 29 cents for 2024 and 2025 [5]