Group 1 Automotive shares jump premarket on upbeat guidance and news to reinstate quarterly dividend

/ / News

Group 1 Automotive Inc. shares rose 3.5% in premarket trade Tuesday, after the car retailer offered upbeat guidance for the third quarter, unveiled a $200 million share buyback program and said it will reinstate its quarterly cash dividend which was suspended during the pandemic. The Houston-based company said it expects third-quarter per-share earnings of $6.25 to $6.65 and adjusted EPS of $6.50 to $6.80. The current FactSet consensus is for EPS of $3.73. The adjusted number excludes a $3.3 million pretax expense that is equal to 15 cents a share, for redeeming all previously issued 5.00% bonds due June 2022. The company expects higher gross margins on new and used cars in the U.S. has offset lower sales volumes. “Group 1’s U.K. operations also contributed to the significant third quarter profit improvement with vehicle sales and service levels recovering from the extensive lockdowns that occurred over April and May,” the company said. UJ.K. new vehicle same-store sales rose about 20% , while used vehicle sales rose in the mid-single digits. The company will reinstate its dividend after a board meeting in mid-November and expects it to be payable in mid-December.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.