Sonic Automotive Inc. reported a first-quarter loss of $541,000, after reporting a profit of $14.6 million in the same quarter a year earlier, according to a filing with the Securities and Exchange Commission.
Adjusted net income from continuing operations fell in line with analyst estimates. For the first quarter of 2017 and 2016 earnings were $10.3 million, or 23 cents per diluted share, and $18.2 million, or 39 cents per diluted share, respectively.
The company’s gross profit per unit was down 2.7 percent compared to the same quarter last year. The auto dealer posted first quarter revenue of $2.3 billion compared to first quarter revenue of $2.2 in 2016, in line with analyst estimates.
Sonic owns 106 car dealerships in 13 states. Shares of the Charlotte, North Carolina-based company were trading at $19.80 on Wednesday morning, down 4 percent. The stock has decreased 16 percent in the last 12 months.
The company reported a loss from operations related to its brand of used-only dealers, EchoPark, of $3.3 million, or 7 cents per diluted share. Comparatively, Sonic reported a loss from EchoPark of $2.2 million, or 5 cents per diluted share, in the same quarter last year.
Sonic has fiveEchoPark stores in the Denver market, two of which opened in late June 2016. The company said it will introduce the brand to Texas and the Carolinas by 2017.
Sonic said it lowered its overall borrowing costs, extended its debt maturities and increased its liquidity through a private placement of $250 million of 6.125 percent senior subordinated notes due in 2027. The company also said it redeemed its 7 percent senior subordinated notes due 2022 for pre-tax charges of $15.3 million, or $0.21 per diluted share.
Sonic’s board of directors approved a quarterly dividend of 5 cents per share payable in cash for stockholders on June 15. The dividend will be payable on July 14.
Bruton Smith, 89, is executive chairman and director of Sonic Automotive. In January 2016, Smith was inducted into the NASCAR Hall of Fame. According to Forbes, the Smith family is worth $1 billion as of 2017.
