Solid Preliminary Results Drive Group 1 Automotive 20% Higher

Shares of Group 1 Automotive (NYSE: GPI), owner and operator of 186 automotive dealerships, jumped over 20% higher Tuesday after the company released preliminary third-quarter results that included a number of positive developments for investors.

The COVID-19 pandemic hit the automotive industry with plunging showroom traffic and production disruptions that have had negative ripple effects since March. However, demand for new vehicles has broadly rebounded and Group 1 Automotive's preliminary third-quarter results support the idea the industry is gaining momentum. Management expects third-quarter adjusted earnings per share to check in between $6.40 to $6.80, well above analysts' estimates of $3.73 per share. The upbeat third-quarter earnings weren't the only positive development as management noted that higher gross margin helped offset lower sales volumes. Management also announced a $200 million share repurchase authorization and expects to reinstate its quarterly cash dividend in mid-November.

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Source Fool.com