Credit: Shutterstock photoShare price of Lithia Motors Inc.LAD increased 2.3% to $104.91 on Apr 23 after the company reported a 35% rise in adjusted earnings per share to $1.39 in the first quarter of 2015 from $1.03 in the corresponding quarter last year. Earnings also surpassed the Zacks Consensus Estimate by 16 cents. Net income surged 36.2% to $36.9 million from $27.1 million in the year-ago quarter.
Lithia Motors Inc. - Earnings Surprise | FindTheCompany
Revenues for the reported quarter increased 66% to $1.79 billion from $1.08 billion in the year-ago quarter. The increase in revenues was driven by better performance across all the segments, with the company's new vehicle sales being the bright spots. Revenues marginally surpassed the Zacks Consensus Estimate of $1.78 billion.
Revenues from new vehicle sales improved 74% to $1.01 billion in the quarter. New vehicle retail sales increased 77.3% to 30,623 units. However, revenues per vehicle decreased by 1.9% to $32.9. On a same-store basis, revenues from new vehicle sales went up 11.3% to $639.5 million.
Revenues from used vehicle retail climbed 53.3% to $462.9 million in the quarter. Revenues from used vehicle wholesale went up 45.7% to $62.2 million. Used vehicle retail sales improved 48.3% to 24,204 units, with revenues per vehicle increasing a marginal 3.4% to $19,126. Same-store revenues from used vehicle retail sales went up 11.1% to $333.3 million, while that from used vehicle wholesale rose 5.6% to $45.1 million.
Revenues from service body and parts went up 65.8% to $173.5 million. Meanwhile, the company's finance and insurance business witnessed a 63% rise in revenues to $64.6 million. Revenues from Fleet and Other surged 86.1% to $18.1 million.
Gross profit increased 58.9% to $273.4 million in the reported quarter from $172.1 million in the year-ago quarter. Operating income improved 51.8% to $67.9 million from $44.7 million in the first quarter of 2014.
Financial Details
Lithia Motors had cash and cash equivalents of $21.02 million as of Mar 31, 2015, down from $29.9 million as of Dec 31, 2014. Total debt was $662.4 million as of Mar 31, 2015, compared with $641 million as of Dec 31, 2014.
The company had an operating cash flow of $38.2 million in the first three months of 2015, compared with a cash outflow of $22.4 million in the first three months of 2014.
Store Openings
In Jan 2015, Lithia Motors opened a Subaru franchise store in Clearlake, TX. The company expects that this store will add $45 million to its annual revenues.
Dividend
Lithia Motors approved a 25% increase in its quarterly dividend to 20 cents per share from the prior payout of 16 cents per share. The dividend will be paid to shareholders on record as of May 15 on May 29, 2015.
Outlook
Lithia Motors expects earnings in the range of $1.55-$1.59 per share for the second quarter of 2015. Also, the company anticipates earnings in the band of $6.20-$6.30 per share for full-year 2015, higher than the previous projection of $5.95-$6.05. The company expects revenues between $7.5 billion and $7.7 billion for 2015, with a 43.5% increase in new vehicle sales and a 36.5% rise in used vehicle sales. Sales from service body and parts will likely increase 40.5%. Capital expenditure is expected to be $100 million.
Lithia Motors currently sports a Zacks Rank #1 (Strong Buy). Other well-ranked stocks in the same industry include Asbury Automotive Group, Inc. ABG , AutoNation Inc. AN and Allison Transmission Holdings, Inc. ALSN . While Asbury Automotive sports a Zacks Rank #1, both AutoNation and Allison Transmission carry a Zacks Rank #2 (Buy).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
