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Lithia Motors, Inc. (LAD - Free Report) reported adjusted earnings per share of $2.01 in first-quarter 2020, which beat the Zacks Consensus Estimate of $1.98. However, the bottom line decreased 18% from the prior-year quarter’s $2.44 per share.
Revenues from new vehicles, used vehicles, F&I and service, and body and parts increased 4%, 22%, 18% and 6%, respectively, in the first two months of 2020. However, lockdown measures to contain the spread of coronavirus hit the company hard in March, which in turn dented overall operating results in the first quarter.
Total revenues fell 1.6% year over year to $2,803.8 million. The figure also missed the Zacks Consensus Estimate of $2,842 million.
Lithia Motors, Inc. Price, Consensus and EPS Surprise
New-vehicle retail revenues declined 6% year over year to $1,373.5 million and missed the Zacks Consensus Estimate of $1,559 million. New-vehicle retail units sold decreased 9.5% from the prior-year quarter to 35,907. The average selling price of new-vehicle retail rose 3.9% year over to year to $38,252.
Used-vehicle retail revenues rose 5.6% year over year to $874.4 million but missed the Zacks Consensus Estimate of $956 million. Revenues from used-vehicle wholesale contracted 13.8% year over year to $66.7 million and missed the consensus mark of $81 million. Used-vehicle retail units sold grew 4.8% from the year-ago quarter to 42,631. The average selling price of used-vehicle retail improved 0.8% to $20,510 from the year-ago figure of $20,353.
Revenues from service, body and parts were up 3.9% from the prior-year period to $329.9 million. The company’s F&I business recorded 3.7% year-over-year growth in revenues to $121.9 million. Revenues from fleet and others were $37.4 million, down 22.7% year over year.
While same-store new vehicle sales decreased 10.6% year over year, same store used vehicle retail sales increased 2.7%. While same-store revenues from the F&I business dropped 0.7% year over year, sales from the service, body and parts unit were up 0.5%.
Dividend, Buyback & Financials
Despite coronavirus-led uncertainty that has prompted many companies to suspend payouts, Lithia Motors intends to maintain dividends, in turn preserving shareholder values. The board approved a dividend of 30 cents per share. The amount will be payable on May 22 to shareholders of record as of Mar 8, 2020. Nonetheless, the firm announced the suspension of buybacks when it reported preliminary first-quarter results. On a year-to-date basis,Lithia Motors has repurchased 563,953 shares, with around $188 million remaining under the current buyback authorization.
The company had cash and cash equivalents of $56.6 million as of Mar 31, 2020. Long-term debt was $1.49 billion, marking an increase from $1.43 billion as of Dec 31, 2019. Debt-to-capital ratio stands at 50.6%.
Cost-Cutting Measures Amid COVID-19 Crisis
As mentioned during its preliminary earnings release, Lithia Motors is implementing a number of cost-containment actions in a bid to sail through the coronavirus crisis. Anticipating bleak scenario ahead, the company has reduced its headcount by 37%, mainly through furloughs. It also slashed or put controls on spending for marketing, vendors and inventory. The firm suspended approximately $65 million in planned discretionary capex. All acquisitions have been deferred until the second half of 2020. In a bid to preserve financial flexibility, Lithia Motors also suspended stock buybacks.
Zacks Rank & Key Picks
Lithia Motors currently carries a Zacks Rank #4 (Sell). On a year-to-date basis, shares of the company have plunged around 34%.
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Lithia Motors' (LAD) Q1 Earnings Top, Sales & EPS Down Y/Y
Lithia Motors, Inc. (LAD - Free Report) reported adjusted earnings per share of $2.01 in first-quarter 2020, which beat the Zacks Consensus Estimate of $1.98. However, the bottom line decreased 18% from the prior-year quarter’s $2.44 per share.
Revenues from new vehicles, used vehicles, F&I and service, and body and parts increased 4%, 22%, 18% and 6%, respectively, in the first two months of 2020. However, lockdown measures to contain the spread of coronavirus hit the company hard in March, which in turn dented overall operating results in the first quarter.
Total revenues fell 1.6% year over year to $2,803.8 million. The figure also missed the Zacks Consensus Estimate of $2,842 million.
Lithia Motors, Inc. Price, Consensus and EPS Surprise
Lithia Motors, Inc. price-consensus-eps-surprise-chart | Lithia Motors, Inc. Quote
Key Takeaways
New-vehicle retail revenues declined 6% year over year to $1,373.5 million and missed the Zacks Consensus Estimate of $1,559 million. New-vehicle retail units sold decreased 9.5% from the prior-year quarter to 35,907. The average selling price of new-vehicle retail rose 3.9% year over to year to $38,252.
Used-vehicle retail revenues rose 5.6% year over year to $874.4 million but missed the Zacks Consensus Estimate of $956 million. Revenues from used-vehicle wholesale contracted 13.8% year over year to $66.7 million and missed the consensus mark of $81 million. Used-vehicle retail units sold grew 4.8% from the year-ago quarter to 42,631. The average selling price of used-vehicle retail improved 0.8% to $20,510 from the year-ago figure of $20,353.
Revenues from service, body and parts were up 3.9% from the prior-year period to $329.9 million. The company’s F&I business recorded 3.7% year-over-year growth in revenues to $121.9 million. Revenues from fleet and others were $37.4 million, down 22.7% year over year.
While same-store new vehicle sales decreased 10.6% year over year, same store used vehicle retail sales increased 2.7%. While same-store revenues from the F&I business dropped 0.7% year over year, sales from the service, body and parts unit were up 0.5%.
Dividend, Buyback & Financials
Despite coronavirus-led uncertainty that has prompted many companies to suspend payouts, Lithia Motors intends to maintain dividends, in turn preserving shareholder values. The board approved a dividend of 30 cents per share. The amount will be payable on May 22 to shareholders of record as of Mar 8, 2020. Nonetheless, the firm announced the suspension of buybacks when it reported preliminary first-quarter results. On a year-to-date basis,Lithia Motors has repurchased 563,953 shares, with around $188 million remaining under the current buyback authorization.
The company had cash and cash equivalents of $56.6 million as of Mar 31, 2020. Long-term debt was $1.49 billion, marking an increase from $1.43 billion as of Dec 31, 2019. Debt-to-capital ratio stands at 50.6%.
Cost-Cutting Measures Amid COVID-19 Crisis
As mentioned during its preliminary earnings release, Lithia Motors is implementing a number of cost-containment actions in a bid to sail through the coronavirus crisis. Anticipating bleak scenario ahead, the company has reduced its headcount by 37%, mainly through furloughs. It also slashed or put controls on spending for marketing, vendors and inventory. The firm suspended approximately $65 million in planned discretionary capex. All acquisitions have been deferred until the second half of 2020. In a bid to preserve financial flexibility, Lithia Motors also suspended stock buybacks.
Zacks Rank & Key Picks
Lithia Motors currently carries a Zacks Rank #4 (Sell). On a year-to-date basis, shares of the company have plunged around 34%.
Some better-ranked stocks in the auto space include Veoneer, Inc. , Spartan Motors, Inc. and Unique Fabricating, Inc. , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>