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Lithia (LAD) Tops Q1 Earnings Estimates, Hikes Dividend

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Lithia Motors (LAD - Free Report) reported first-quarter 2022 adjusted earnings of $11.96 per share, marking a whopping 103% increase from the prior-year quarter’s $5.89 per share. The bottom line also beat the Zacks Consensus Estimate of $9.63. Higher-than-expected revenues from new vehicle, used-vehicle (retail and wholesale) and fleet and others segments led to the upside.

Total revenues jumped 54% year over year to $6,705.3 million. The top line also exceeded the Zacks Consensus Estimate of $6,031.8 million.

Lithia Motors claims to have reported the highest first-quarter earnings and revenues in its history.

Lithia Motors, Inc. Price, Consensus and EPS Surprise

Lithia Motors, Inc. Price, Consensus and EPS Surprise

Lithia Motors, Inc. price-consensus-eps-surprise-chart | Lithia Motors, Inc. Quote

Segmental Performance

New vehicle retail revenues increased 39.6% year over year to $3,061.8 million and topped the Zacks Consensus Estimate of $2,476 million. New vehicle units sold climbed 20.6% from the prior-year quarter to 64,942. The average selling price of new-vehicle retail rose 15.8% to $47,146.

The used-vehicle retail revenues surged 65.2% year over year to $2,234.5 million and topped the Zacks Consensus Estimate of $2,044 million. The used-vehicle retail units sold grew 24.8% from the year-ago quarter to 73,689. The average selling price of used-vehicle retail improved 32.4% to $30,323. Revenues from used-vehicle wholesale skyrocketed 185.4% to $385.8 million and surpassed the consensus mark of $316 million.

Revenues from service, body and parts were up 55.4% from the prior-year period to $627.8 million and crossed the Zacks Consensus Estimate of $503 million. The company’s F&I business’ revenues grew 57.9% to $313.2 million. The figure also topped the consensus estimate of $269 million. Revenues from fleet and others were $82.2 million, rising 37% year over year and exceeding the consensus mark of $55 million.

While the same-store new vehicle revenues fell 2.6% year over year, the same-store used vehicle retail sales increased 30.6%. The same-store revenues from the F&I business climbed 16.6%, and that of the service, body and parts unit grew 13.3%.

Financial Tidbits

Cost of sales jumped 49.6% year over year in first-quarter 2022. SG&A expenses — as a percentage of gross profit — improved 550 basis points from 62.6% to 57.1%. Encouragingly, pretax and net profit margins also improved from the year-ago levels.

The company approved a dividend of 42 cents per share for first quarter 2022, which marks an increase from the previous payout of 35 cents. The dividend is to be paid on May 27, 2022, to shareholders of record on May 13. Year-to-date, the company has repurchased 515,130 shares at a weighted average price of $292.80. Nearly $572 million remains under its authorization.

Lithia had cash and cash equivalents of $161.4 million as of Mar 31, 2022, down from $174.8 million as of Dec 31, 2021. Long-term debt was $3,395.2 million, marking an increase from $3,185.7 million as of Dec 31, 2021.

Zacks Rank & Key Picks

LAD currently carries a Zacks Rank #3 (Hold).

Better-ranked players in the auto space include AutoNation, Inc. (AN - Free Report) , sporting a Zacks Rank #1 (Strong Buy),  and Group 1 Automotive, Inc. (GPI - Free Report) and Penske Automotive Group (PAG - Free Report) , each carrying a Zacks Rank #2 (Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

AutoNation has an expected earnings growth rate of 11.14% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 8.3% upward in the past 60 days.

AutoNation’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. AN pulled off a trailing four-quarter earnings surprise of 39.3%, on average. The stock has risen 9.8% over the past year.

Group 1 has an expected earnings growth rate of around 10% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 8% upward in the past 60 days.

Group 1’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. GPI pulled off a trailing four-quarter earnings surprise of 10%, on average. The stock has gained 10.2% over the past year.

The Zacks Consensus Estimate for Penske’s current-year earnings has been revised around 7% upward in the past 60 days.

Penske’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. PAG pulled off a trailing four-quarter earnings surprise of 19%, on average. The stock has grown 18.7% over the past year.

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