October 24, 2020

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

MARKET PULSE

Group 1 Automotive Inc. shares (gpi) 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

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