Charlotte-based Sonic Automotive was trading higher Monday after reporting second-quarter net income of $41.2 million, up 76% year-over-year. It reported a profit of $1.18 per share. Earnings, adjusted for non-recurring costs, were $1.47 per share.
Zacks Research Investment analysts estimated a profit of $1.39 per share. Sonic’s board of directors approved a quarterly cash dividend of $0.30 per share, payable on Oct. 15 to all stockholders of record on Sept. 13.
The higher net income came despite total revenues of $3.45 billion, down 5% year-over-year ($3.65 billion). Four analysts surveyed by Zacks expected $3.55 billion in revenue. A reported total gross profit of $539.1 million was also down 5% year-over-year ($568.9 billion).
Sonic faced challenges in the second quarter from the CDK Global software outage that started in June after a cyberattack. Sonic reported the outage reduced second quarter income before taxes by about $30 million and net income by about $22.2 million. About $11.6 million of the pre-tax CDK impact was related to excess pay for its employees as a result of the outage.
“As of today, Sonic’s access to the information systems provided by CDK has been restored, however we experienced operational disruptions throughout July related to the functionality of certain CDK customer lead applications, inventory management applications and related third-party application integrations with CDK,” says CEO David Bruton Smith in a statement.
Sonic shares were one of the few bright spots in early trading Monday, trading around $60.42 at noon Monday, up $4.32 (7.73%). The stock market as a whole was down, with the Dow 30 down around 2% (around 800 points) and the Nasdaq down around 2.5 % (around 450 points), on global fears the U.S. may be headed into a recession.
Sonic has a 52-week range of between $41.19 and $64.68, with a market cap (intraday) of $2.066 billion. Sonic is the fifth largest U.S. auto retailer, with two operating segments consisting of franchised dealerships that represents about 25 new vehicle brands and EchoPark Automotive, which sells used vehicles. David Smith’s late father, Bruton Smith, incorporated the business in 1997.