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Lithia Motors (LAD) Q1 Earnings Top Estimates, Revenues Miss

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Lithia Motors, Inc. (LAD - Free Report) reported adjusted earnings per share of $2.44 in first-quarter 2019, marking an 18% increase from $2.07 in the prior-year quarter. Further, the bottom line beat the Zacks Consensus Estimate of $2.15. This increase was owing to strong performance by the company’s three more-profitable business lines, consisting of retail used vehicles, finance and insurance (F&I), and service body and parts.

Reportedly, in the quarter under review, adjusted net income rose 9% year over year to $57 million. Total revenues in the quarter increased 7% year over year to $2.85 billion, narrowly missing the Zacks Consensus Estimate of $2.89 billion.

Gross profit rose 10.4% to $450.7 million in the quarter under review from $408.1 million in the year-ago quarter.

Lithia Motors, Inc. Price, Consensus and EPS Surprise

 

Quarter in Detail

Revenues from new-vehicle retail inched up 0.4% year over year to $1.46 billion in the reported quarter. New-vehicle retail unit sales declined 4.3% to 39,695. The average selling price of new-vehicle retail rose 5% to $36,809 from the year-ago figure.

Used-vehicle retail revenues increased 15.7% year over year to $828 million in the quarter under review while revenues from used-vehicle wholesale rose 1.8% to $77 million. Used-vehicle retail unit sales improved 12.6% to 40,675. The average selling price of used-vehicle retail gained 2.7% to $20,353 million from the year-ago figure.

Revenues from service body and parts went up 11.1% to $317 million. The company’s F&I business recorded 10.3% rise in revenues to $118 million. Revenues from fleet and others were $48.4 million compared with the year-ago figure of $21.2 million.

Financial Details

Lithia Motors had cash and cash equivalents of $45 million as of Mar 31, 2019, up from $31.6 million as of Dec 31, 2018. Long-term debt was $1.3 billion as of Mar 31, 2018, marking a decrease from $1.36 billion recorded on Dec 31, 2018.

Dividend Payment

Lithia Motors’ board approved a quarterly dividend of 30 cents per share for first-quarter 2019. The amount will be payable on May 24, 2019, to shareholders of record as of May 10, 2019.

Zacks Rank & Stocks to Consider

Lithia Motors currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader auto sector are AB Volvo (VLVLY - Free Report) , PACCAR Inc. (PCAR - Free Report) and Fox Factory Holding Corporation (FOXF - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Volvo has an expected long-term growth rate of 5%. The stock has gained 16.7% in the past three months.

PACCAR has an expected long-term growth rate of 8.4%. The stock has gained 14% in the past three months.

Fox Factory has an expected long-term growth rate of 15.1%. Over the past three months, shares of the company have gained 27.9%.

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