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Lithia (LAD) Q1 Earnings Miss Expectations, Dividend Hiked
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Lithia Motors (LAD - Free Report) reported first-quarter 2024 adjusted earnings per share (EPS) of $6.11, which declined from the prior-year quarter’s $8.44 and missed the Zacks Consensus Estimate of $7.85.
Total revenues jumped 23% year over year to $8.56 billion. The top line outpaced the Zacks Consensus Estimate of $8.5 billion.
Lithia Motors, Inc. Price, Consensus and EPS Surprise
New vehicle retail revenues increased 22.4% year over year to $4 billion, missing our estimate of $4.3 billion due to a lower-than-expected number of units sold and average selling price (ASP).
New vehicle units sold rose 26.4% from the prior-year quarter’s levels to 85,683 units, missing our estimate of 86,301 units.
The ASP of new-vehicle retail decreased to $46,848 from $48,364 reported in the prior-year quarter, lagging our estimate of $49,935. The gross margin in this segment contracted 280 basis points (bps) to 7.4% amid the high cost of sales, which flared up 26.3% year over year to $3.72 billion.
Used-vehicle retail revenues rose 25.7% year over year to $2.8 billion and beat our estimate of $2.62 billion. Higher-than-anticipated number of units sold resulted in the outperformance.
The used-vehicle retail units sold rose 31.1% from the year-ago quarter to 102,436 units, outpacing our expectation of 89,091 units. The ASP of used-vehicle retail was $27,342, dropping 4.1% year over year and missing our estimate of $29,420. The gross margin in the segment declined 20 bps to 7.2%.
Revenues from used-vehicle wholesale fell 6.9% to $332.2 million and missed our estimate of $396.5 million.
Revenues from service, body and parts were up 24% from the prior-year period’s levels to $912.8 million, outpacing our estimate of $748.9 million. The gross margin in the segment increased 140 bps to 55%.
The company’s finance and insurance revenues rose 7% to $340.6 million and exceeded our estimate of $321.3 million.
Revenues from fleet and others were $155.9 million, which increased 177.9% year over year and topped our expectation of $68.4 million.
Same-store new-vehicle revenues increased 2.3% year over year and same-store used-vehicle retail sales declined 5%.
Same-store revenues from finance and insurance fell 4.8%, while that of the service, body and parts unit grew 3.2%.
Financial Tidbits
Cost of sales jumped 25.3% year over year in first-quarter 2024. SG&A expenses were $934.3 million, up 22.2% from $764.4 million reported in the year-ago quarter. Adjusted SG&A as a percentage of gross profit was 69.4%. Pretax and net profit margins declined from the year-ago levels.
The company hiked its quarterly dividend to 53 cents per share from 50 cents. The dividend is to be paid on May 24, 2024, to shareholders of record as of May 10, 2024. The company repurchased nearly 58,000 shares at an average price of $264.42. As of Mar 31, 2024, Lithia had approximately $451.7 million shares remaining under its buyback authorization.
Lithia had cash/cash equivalents/restricted cash of $404.6 million as of Mar 31, 2024, down from $941.1 million as of Dec 31, 2023. Long-term debt was $5.7 billion as of Mar 31, 2024, up from $5.5 billion as of Dec 31, 2023.
The Zacks Consensus Estimate for GELYY’s 2024 sales suggests year-over-year growth of 36.6%. The EPS estimates for 2024 and 2025 have moved up 34 cents and 54 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for VLVLY’s 2024 earnings suggests year-over-year growth of 0.43%. The EPS estimates for 2025 have improved 11 cents in the past 30 days.
The Zacks Consensus Estimate for GOEV’s 2024 sales and earnings suggests year-over-year growth of 7,722.3% and 68.24%, respectively. The EPS estimates for 2024 and 2025 have improved $4.27 and $4.71, respectively, in the past 30 days.
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Lithia (LAD) Q1 Earnings Miss Expectations, Dividend Hiked
Lithia Motors (LAD - Free Report) reported first-quarter 2024 adjusted earnings per share (EPS) of $6.11, which declined from the prior-year quarter’s $8.44 and missed the Zacks Consensus Estimate of $7.85.
Total revenues jumped 23% year over year to $8.56 billion. The top line outpaced the Zacks Consensus Estimate of $8.5 billion.
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 22.4% year over year to $4 billion, missing our estimate of $4.3 billion due to a lower-than-expected number of units sold and average selling price (ASP).
New vehicle units sold rose 26.4% from the prior-year quarter’s levels to 85,683 units, missing our estimate of 86,301 units.
The ASP of new-vehicle retail decreased to $46,848 from $48,364 reported in the prior-year quarter, lagging our estimate of $49,935. The gross margin in this segment contracted 280 basis points (bps) to 7.4% amid the high cost of sales, which flared up 26.3% year over year to $3.72 billion.
Used-vehicle retail revenues rose 25.7% year over year to $2.8 billion and beat our estimate of $2.62 billion. Higher-than-anticipated number of units sold resulted in the outperformance.
The used-vehicle retail units sold rose 31.1% from the year-ago quarter to 102,436 units, outpacing our expectation of 89,091 units. The ASP of used-vehicle retail was $27,342, dropping 4.1% year over year and missing our estimate of $29,420. The gross margin in the segment declined 20 bps to 7.2%.
Revenues from used-vehicle wholesale fell 6.9% to $332.2 million and missed our estimate of $396.5 million.
Revenues from service, body and parts were up 24% from the prior-year period’s levels to $912.8 million, outpacing our estimate of $748.9 million. The gross margin in the segment increased 140 bps to 55%.
The company’s finance and insurance revenues rose 7% to $340.6 million and exceeded our estimate of $321.3 million.
Revenues from fleet and others were $155.9 million, which increased 177.9% year over year and topped our expectation of $68.4 million.
Same-store new-vehicle revenues increased 2.3% year over year and same-store used-vehicle retail sales declined 5%.
Same-store revenues from finance and insurance fell 4.8%, while that of the service, body and parts unit grew 3.2%.
Financial Tidbits
Cost of sales jumped 25.3% year over year in first-quarter 2024. SG&A expenses were $934.3 million, up 22.2% from $764.4 million reported in the year-ago quarter. Adjusted SG&A as a percentage of gross profit was 69.4%. Pretax and net profit margins declined from the year-ago levels.
The company hiked its quarterly dividend to 53 cents per share from 50 cents. The dividend is to be paid on May 24, 2024, to shareholders of record as of May 10, 2024. The company repurchased nearly 58,000 shares at an average price of $264.42. As of Mar 31, 2024, Lithia had approximately $451.7 million shares remaining under its buyback authorization.
Lithia had cash/cash equivalents/restricted cash of $404.6 million as of Mar 31, 2024, down from $941.1 million as of Dec 31, 2023. Long-term debt was $5.7 billion as of Mar 31, 2024, up from $5.5 billion as of Dec 31, 2023.
Zacks Rank & Key Picks
LAD currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the auto space are Geely Automobile Holdings Limited (GELYY - Free Report) , Volvo (VLVLY - Free Report) and Canoo Inc. (GOEV - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GELYY’s 2024 sales suggests year-over-year growth of 36.6%. The EPS estimates for 2024 and 2025 have moved up 34 cents and 54 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for VLVLY’s 2024 earnings suggests year-over-year growth of 0.43%. The EPS estimates for 2025 have improved 11 cents in the past 30 days.
The Zacks Consensus Estimate for GOEV’s 2024 sales and earnings suggests year-over-year growth of 7,722.3% and 68.24%, respectively. The EPS estimates for 2024 and 2025 have improved $4.27 and $4.71, respectively, in the past 30 days.