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Why Is Lithia Motors (LAD) Down 3.4% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Lithia Motors, Inc. (LAD - Free Report) . Shares have lost about 3.4% in the past month, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Lithia Motors Beats on Q1 Earnings, Hikes Dividend
Lithia Motors recorded a 14.8% rise in adjusted earnings per share to $1.78 in the first quarter of 2017 from $1.55 in the prior-year quarter. Moreover, earnings beat the Zacks Consensus Estimate of $1.77 by a penny. Adjusted net income rose almost 11.5% to $45 million from $40.4 million in the year-ago quarter.
Net income, on a reported basis, was $50.7 million or $2.01 per share compared with $40.3 million or $1.55 in the first quarter of 2016.
Revenues for the reported quarter went up 12.8% to $2.24 billion from $1.98 billion in the year-ago quarter. However, the figure missed the Zacks Consensus Estimate of $2.29 billion. Revenues and reported earnings in the quarter were first-quarter records.
Revenues from new vehicle retail sales increased 10.4% to $1.21 billion in the quarter. New vehicle retail sales volume improved 8.8% to 35,616 units. Revenues per vehicle rose 1.5% to $33,982.
Used vehicle retail revenues increased 13% to $602.2 million in the quarter, whereas revenues from used vehicle wholesale rose 9.8% to $71.5 million. Used vehicle retail sales volume improved 12.2% to 30,783 units, with revenues per vehicle inching up 0.7% to $19,563.
Revenues from service body and parts went up 18.3% to $228.4 million. Meanwhile, the company’s finance and insurance business recorded a 21.9% rise in revenues to $84.5 million. Revenues from fleet and other decreased 54.1% to $14 million.
Gross profit increased 18.3% to $232.6 million in the reported quarter from $196.7 million in the year-ago quarter.
Domestic segment revenues increased 16.6% to $899.8 million as retail new vehicle unit sales rose 14.1% to 12,240. The segment’s income improved 10% to $25.4 million in the quarter under review.
Import segment revenues went up 12.6% to $971.5 million as retail new vehicle unit sales rose 10% to 19,835 automobiles. Segment income dipped 8.6% to $22.2 million in the reported quarter.
Revenues at the Luxury segment rose 4.9% to $363.8 million. Retail new vehicle sales fell 11% to 3,616 luxury vehicles. Meanwhile, the segment's income rose 2.8% to $4.7 million in the quarter.
Financial Details
Lithia Motors had cash and cash equivalents of $31.4 million as of Mar 31, 2017, down from $50.3 million as of Dec 31, 2016. Total debt was $684 million as of Mar 31, 2017, compared with $790.9 million as of Dec 31, 2016.
Dividend & Share Repurchase
Lithia Motors announced an 8% hike in the quarterly dividend, taking it to $0.27 per share. The dividend will be paid on May 26, to shareholders on record as of May 12, 2017.
In 2017, the company repurchased 198,000 shares at an average price of $86.41 per share as of Apr 19. Under the current share repurchase authorization of $250 million, Lithia Motors has around $176 million available for future repurchase.
Outlook
Lithia Motors increased the anticipated earnings range to $8.05–$8.35 per share from $8–$8.30 per share for full-year 2017. The company continues to expect revenues between $9.2 billion and $9.4 billion for 2017.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There has been one upward revisions for the current quarter compared to one downward.
VGM Scores
At this time, Lithia Motors' stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with a 'C'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for value and growth investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is Lithia Motors (LAD) Down 3.4% Since the Last Earnings Report?
It has been about a month since the last earnings report for Lithia Motors, Inc. (LAD - Free Report) . Shares have lost about 3.4% in the past month, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Lithia Motors Beats on Q1 Earnings, Hikes Dividend
Lithia Motors recorded a 14.8% rise in adjusted earnings per share to $1.78 in the first quarter of 2017 from $1.55 in the prior-year quarter. Moreover, earnings beat the Zacks Consensus Estimate of $1.77 by a penny. Adjusted net income rose almost 11.5% to $45 million from $40.4 million in the year-ago quarter.
Net income, on a reported basis, was $50.7 million or $2.01 per share compared with $40.3 million or $1.55 in the first quarter of 2016.
Revenues for the reported quarter went up 12.8% to $2.24 billion from $1.98 billion in the year-ago quarter. However, the figure missed the Zacks Consensus Estimate of $2.29 billion. Revenues and reported earnings in the quarter were first-quarter records.
Revenues from new vehicle retail sales increased 10.4% to $1.21 billion in the quarter. New vehicle retail sales volume improved 8.8% to 35,616 units. Revenues per vehicle rose 1.5% to $33,982.
Used vehicle retail revenues increased 13% to $602.2 million in the quarter, whereas revenues from used vehicle wholesale rose 9.8% to $71.5 million. Used vehicle retail sales volume improved 12.2% to 30,783 units, with revenues per vehicle inching up 0.7% to $19,563.
Revenues from service body and parts went up 18.3% to $228.4 million. Meanwhile, the company’s finance and insurance business recorded a 21.9% rise in revenues to $84.5 million. Revenues from fleet and other decreased 54.1% to $14 million.
Gross profit increased 18.3% to $232.6 million in the reported quarter from $196.7 million in the year-ago quarter.
Domestic segment revenues increased 16.6% to $899.8 million as retail new vehicle unit sales rose 14.1% to 12,240. The segment’s income improved 10% to $25.4 million in the quarter under review.
Import segment revenues went up 12.6% to $971.5 million as retail new vehicle unit sales rose 10% to 19,835 automobiles. Segment income dipped 8.6% to $22.2 million in the reported quarter.
Revenues at the Luxury segment rose 4.9% to $363.8 million. Retail new vehicle sales fell 11% to 3,616 luxury vehicles. Meanwhile, the segment's income rose 2.8% to $4.7 million in the quarter.
Financial Details
Lithia Motors had cash and cash equivalents of $31.4 million as of Mar 31, 2017, down from $50.3 million as of Dec 31, 2016. Total debt was $684 million as of Mar 31, 2017, compared with $790.9 million as of Dec 31, 2016.
Dividend & Share Repurchase
Lithia Motors announced an 8% hike in the quarterly dividend, taking it to $0.27 per share. The dividend will be paid on May 26, to shareholders on record as of May 12, 2017.
In 2017, the company repurchased 198,000 shares at an average price of $86.41 per share as of Apr 19. Under the current share repurchase authorization of $250 million, Lithia Motors has around $176 million available for future repurchase.
Outlook
Lithia Motors increased the anticipated earnings range to $8.05–$8.35 per share from $8–$8.30 per share for full-year 2017. The company continues to expect revenues between $9.2 billion and $9.4 billion for 2017.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There has been one upward revisions for the current quarter compared to one downward.
VGM Scores
At this time, Lithia Motors' stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with a 'C'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for value and growth investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.