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Lithia's (LAD) Q4 Earnings Surpass Estimates, Sales Miss
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Lithia Motors (LAD - Free Report) reported fourth-quarter adjusted earnings of $11.39 per share, a whopping 109% increase from the prior-year quarter’s $5.46 per share. The figure also beat the Zacks Consensus Estimate of $9.99. Higher-than-expected revenues from new vehicle, used-vehicle (retail and wholesale) and fleet and others segments led to this outperformance.
Total revenues jumped 60.1% year over year to $6,309.5 million, but the top line missed the Zacks Consensus Estimate of $6,318.4 million.
Lithia Motors claims to have reported the highest fourth-quarter earnings and revenues in its history.
Segmental Performance
New vehicle retail revenues increased 37.7% year over year to $2,960 million and topped the Zacks Consensus Estimate of $2,930 million. New vehicle units sold climbed 23.5% from the prior-year quarter to 64,812. The average selling price of new-vehicle retail rose 11.5% to $45,671.
The used-vehicle retail revenues surged 82.1% year over year to $2,018.7 million and marginally missed the Zacks Consensus Estimate of $2,019 million. The used-vehicle retail units sold grew 46.5% from the year-ago quarter to 69,914. The average selling price of used-vehicle retail improved 24.3% to $28,874 from the year-ago figure. Revenues from used-vehicle wholesale skyrocketed 274.3% to $343.6 million and surpassed the consensus mark of $259 million.
Revenues from service, body and parts were up 58.3% from the prior-year period to $607.6 million, but missed the Zacks Consensus Estimate of $610 million. The company’s F&I business recorded 65.9% year-over-year growth in revenues to $286.3 million, but missed the consensus estimate of $294 million. Revenues from fleet and others were $93.3 million, jumping 164.3% year over year and exceeding the consensus mark of $54 million.
While the same-store new vehicle revenues fell 8.1% year over year, the same-store used vehicle retail sales increased 39.4%. The same-store revenues from the F&I business climbed 18.5%, and that of the service, body and parts unit grew 11.7%.
Financial Tidbits
Cost of sales jumped 53.8% year over year in fourth-quarter 2021. SG&A expenses — as a percentage of gross profit — declined 520 basis points from 62% recorded in the prior-year quarter to 56.8%. Encouragingly, pretax and net profit margins also improved from the year-ago levels.
A quarterly dividend of 35 cents a share will be payable on Mar 25, 2022, to shareholders of record on Mar 11, 2022.
Lithia had cash and cash equivalents of $174.8 million as of Dec 31, 2021. Long-term debt was $3,185.7 million, marking a 54.3% increase from $2,064.7 million as of Dec 31, 2020.
During the quarter, LAD repurchased 756,883 shares at a weighted average price of $283.75. In 2022, it has repurchased almost an additional 154,923 shares at a weighted average price of $283.89.
Goodyear has an expected earnings growth rate of 51.7% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 1.1% upward over the past 60 days.
Goodyear’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. GT pulled off a trailing four-quarter earnings surprise of 228.5%, on average. The stock has also rallied 52.8% over a year.
Tesla has an expected earnings growth rate of 35.21% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 5% upward over the past 60 days.
Tesla’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 25.38%, on average. The stock has also rallied 14.9% over a year.
Genuine Parts has an expected earnings growth rate of 10.03% for the current year. The Zacks Consensus Estimate for earnings for the current year has been revised around 2.2% upward over the past 60 days.
Genuine Parts’ earnings beat the Zacks Consensus Estimate in all the trailing four quarters. GPC pulled off a trailing four-quarter earnings surprise of around 16%, on average. The stock has also rallied 31.4% over a year.
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Lithia's (LAD) Q4 Earnings Surpass Estimates, Sales Miss
Lithia Motors (LAD - Free Report) reported fourth-quarter adjusted earnings of $11.39 per share, a whopping 109% increase from the prior-year quarter’s $5.46 per share. The figure also beat the Zacks Consensus Estimate of $9.99. Higher-than-expected revenues from new vehicle, used-vehicle (retail and wholesale) and fleet and others segments led to this outperformance.
Total revenues jumped 60.1% year over year to $6,309.5 million, but the top line missed the Zacks Consensus Estimate of $6,318.4 million.
Lithia Motors claims to have reported the highest fourth-quarter earnings and revenues in its history.
Segmental Performance
New vehicle retail revenues increased 37.7% year over year to $2,960 million and topped the Zacks Consensus Estimate of $2,930 million. New vehicle units sold climbed 23.5% from the prior-year quarter to 64,812. The average selling price of new-vehicle retail rose 11.5% to $45,671.
The used-vehicle retail revenues surged 82.1% year over year to $2,018.7 million and marginally missed the Zacks Consensus Estimate of $2,019 million. The used-vehicle retail units sold grew 46.5% from the year-ago quarter to 69,914. The average selling price of used-vehicle retail improved 24.3% to $28,874 from the year-ago figure. Revenues from used-vehicle wholesale skyrocketed 274.3% to $343.6 million and surpassed the consensus mark of $259 million.
Revenues from service, body and parts were up 58.3% from the prior-year period to $607.6 million, but missed the Zacks Consensus Estimate of $610 million. The company’s F&I business recorded 65.9% year-over-year growth in revenues to $286.3 million, but missed the consensus estimate of $294 million. Revenues from fleet and others were $93.3 million, jumping 164.3% year over year and exceeding the consensus mark of $54 million.
While the same-store new vehicle revenues fell 8.1% year over year, the same-store used vehicle retail sales increased 39.4%. The same-store revenues from the F&I business climbed 18.5%, and that of the service, body and parts unit grew 11.7%.
Financial Tidbits
Cost of sales jumped 53.8% year over year in fourth-quarter 2021. SG&A expenses — as a percentage of gross profit — declined 520 basis points from 62% recorded in the prior-year quarter to 56.8%. Encouragingly, pretax and net profit margins also improved from the year-ago levels.
A quarterly dividend of 35 cents a share will be payable on Mar 25, 2022, to shareholders of record on Mar 11, 2022.
Lithia had cash and cash equivalents of $174.8 million as of Dec 31, 2021. Long-term debt was $3,185.7 million, marking a 54.3% increase from $2,064.7 million as of Dec 31, 2020.
During the quarter, LAD repurchased 756,883 shares at a weighted average price of $283.75. In 2022, it has repurchased almost an additional 154,923 shares at a weighted average price of $283.89.
Zacks Rank & Other Key Picks
Currently, Lithia has a Zacks Rank #2 (Buy).
Some other top-ranked players in the auto space are Goodyear Tire (GT - Free Report) and Tesla (TSLA - Free Report) , each sporting a Zacks Rank #1(Strong Buy) and Genuine Parts (GPC - Free Report) , carrying a Zacks Rank #2 currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Goodyear has an expected earnings growth rate of 51.7% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 1.1% upward over the past 60 days.
Goodyear’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. GT pulled off a trailing four-quarter earnings surprise of 228.5%, on average. The stock has also rallied 52.8% over a year.
Tesla has an expected earnings growth rate of 35.21% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 5% upward over the past 60 days.
Tesla’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 25.38%, on average. The stock has also rallied 14.9% over a year.
Genuine Parts has an expected earnings growth rate of 10.03% for the current year. The Zacks Consensus Estimate for earnings for the current year has been revised around 2.2% upward over the past 60 days.
Genuine Parts’ earnings beat the Zacks Consensus Estimate in all the trailing four quarters. GPC pulled off a trailing four-quarter earnings surprise of around 16%, on average. The stock has also rallied 31.4% over a year.