Lithia Motors (LAD - Free Report) reported third-quarter 2020 adjusted earnings of $6.89 per share, which beat the Zacks Consensus Estimate of $6.21. Higher-than-expected revenues across all units led to the outperformance. The bottom line also increased a whopping 103% from the prior-year quarter’s $3.39 per share. In fact, Lithia Motors claims to have reported the highest quarterly income in the company's history. Total revenues rose around 9% year over year to $3,620.2 million. Moreover, the top line surpassed the Zacks Consensus Estimate of $3,567 million.
Key Takeaways
New vehicle retail revenues increased 3.2% year over year to $1,883.3 million and topped the Zacks Consensus Estimate of $1,874 million. While new vehicle units sold decreased 1.2% from the prior-year quarter to 47,923, the average selling price of new-vehicle retail rose 4.5% to $39,298.
Used-vehicle retail revenues rose 19.3% year over year to $1093.2 million and beat the Zacks Consensus Estimate of $1,060 million. Used-vehicle retail units sold grew 11.8% from the year-ago quarter to 49,363. The average selling price of used-vehicle retail improved 6.7% to $22,145 from the year-ago figure of $20,756. Revenues from used-vehicle wholesale surged 32.8% year over year to $98.8 million and surpassed the consensus mark of $53 million.
Revenues from service, body and parts were up 5.6% from the prior-year period to $360 million, marginally beating the consensus mark of $359 million. The company’s F&I (Finance & Insurance) business recorded 17.8% year-over-year growth in revenues to $160.5 million and topped the consensus estimate of $158 million. Revenues from fleet and others were $24.9 million, down 37.9% year over year.
While same-store new vehicle sales decreased 4.4% year over year, same-store used vehicle retail sales increased 11.2%. While same-store revenues from the F&I business rose 6.6%, the same from the service, body and parts unit dropped 2.9% from the prior-year quarter.
Cost of sales increased 5.2% year over year for third-quarter 2020. SG&A, as a percentage of gross profit, declined from the prior-year level. Pretax and net profit margins improved from the year-ago levels.
Quarterly dividend of 31 cents a share will be payable on Nov 27 to shareholders of record as of Nov 13, 2020.
It had cash and cash equivalents of $57.1 million as of Sep 30, 2020. Long-term debt was $1,799 million, marking an increase from $1,430 million as of Dec 31, 2019.
Zacks Rank & Stocks to Consider
Lithia Motors currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the auto space include Asbury Automotive Group Inc. (ABG - Free Report) , Americas CarMart Inc. (CRMT - Free Report) and Group 1 Automotive Inc. (GPI - Free Report) , each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Lithia Motors (LAD - Free Report) reported third-quarter 2020 adjusted earnings of $6.89 per share, which beat the Zacks Consensus Estimate of $6.21. Higher-than-expected revenues across all units led to the outperformance. The bottom line also increased a whopping 103% from the prior-year quarter’s $3.39 per share. In fact, Lithia Motors claims to have reported the highest quarterly income in the company's history. Total revenues rose around 9% year over year to $3,620.2 million. Moreover, the top line surpassed the Zacks Consensus Estimate of $3,567 million.
Key Takeaways
New vehicle retail revenues increased 3.2% year over year to $1,883.3 million and topped the Zacks Consensus Estimate of $1,874 million. While new vehicle units sold decreased 1.2% from the prior-year quarter to 47,923, the average selling price of new-vehicle retail rose 4.5% to $39,298.
Used-vehicle retail revenues rose 19.3% year over year to $1093.2 million and beat the Zacks Consensus Estimate of $1,060 million. Used-vehicle retail units sold grew 11.8% from the year-ago quarter to 49,363. The average selling price of used-vehicle retail improved 6.7% to $22,145 from the year-ago figure of $20,756. Revenues from used-vehicle wholesale surged 32.8% year over year to $98.8 million and surpassed the consensus mark of $53 million.
Revenues from service, body and parts were up 5.6% from the prior-year period to $360 million, marginally beating the consensus mark of $359 million. The company’s F&I (Finance & Insurance) business recorded 17.8% year-over-year growth in revenues to $160.5 million and topped the consensus estimate of $158 million. Revenues from fleet and others were $24.9 million, down 37.9% year over year.
While same-store new vehicle sales decreased 4.4% year over year, same-store used vehicle retail sales increased 11.2%. While same-store revenues from the F&I business rose 6.6%, the same from the service, body and parts unit dropped 2.9% from the prior-year quarter.
Cost of sales increased 5.2% year over year for third-quarter 2020. SG&A, as a percentage of gross profit, declined from the prior-year level. Pretax and net profit margins improved from the year-ago levels.
Quarterly dividend of 31 cents a share will be payable on Nov 27 to shareholders of record as of Nov 13, 2020.
It had cash and cash equivalents of $57.1 million as of Sep 30, 2020. Long-term debt was $1,799 million, marking an increase from $1,430 million as of Dec 31, 2019.
Zacks Rank & Stocks to Consider
Lithia Motors currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the auto space include Asbury Automotive Group Inc. (ABG - Free Report) , Americas CarMart Inc. (CRMT - Free Report) and Group 1 Automotive Inc. (GPI - Free Report) , each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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