Automotive retailer Lithia Motors Inc. (LAD - Free Report) expanded its footprint in Salem, Ore. with the acquisition of O'Brien Auto Group of Salem.
The sale included O'Brien’s stores, which will be named BMW of Salem, Honda of Salem under Honda Motor Co.’s (HMC - Free Report) dealership and Volkswagen of Salem under Volkswagen AG’s (VLKAY - Free Report) dealership. The acquired dealerships are expected to generate $110.0 million in estimated annual revenues.
With this acquisition, Lithia will get exclusive franchises in the market of Ore. In 2012, the company operated 19 stores in Ore, which contributed 20% of its total annual revenues. In addition, the acquisition will strengthen the automotive retailer’s relation with auto manufactures.
Lithia Motors is the ninth largest automotive retailer in the U.S. With 88 stores in 11 states, the company provides 27 new vehicle brands along with all brands of used vehicle. Currently, it retains a Zacks Rank #2 (Buy).
Lithia posted a 42.4% increase in earnings per share to 84 cents in the first quarter of 2013 from 59 cents in the corresponding quarter last year. Reported earnings also surpassed the Zacks Consensus Estimate by 12 cents.
Revenues for the quarter increased 22.3% to $903.1 million from $738.2 million in the year-ago quarter, beating the Zacks Consensus Estimate of $835 million. The improvement in revenues was driven by better performance across all the segments, with finance and insurance business, and new and used vehicle sales being the bright spots.
In Dec 2012, another automotive retailer AutoNation Inc. (AN - Free Report) acquired Audi, Porsche, and three Volkswagen stores in Dallas from Boardwalk Auto Group, and also bought Spring Chrysler Jeep Dodge Ram dealership in Houston from Alfred Flores and Bruce Glascock. Both of these companies earlier involved with Red McCombs Automotive Group. The stores sold a total of 14,000 new and used vehicles in FY12, generating about $590 million of revenues.