Lithia Profits Jump 80% - Analyst Blog

By Zacks Equity Research,

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Lithia Motors ( LAD ) reported a significant 80% increase in profits to $15.8 million or 60 cents per share in the first quarter of 2012 from $8.8 million or 33 cents in the corresponding quarter of last year (all excluding special items). With this, it surpassed the Zacks Consensus Estimate by 18 cents per share during the quarter.

Revenues in the quarter hiked 30% to $758.9 million from $582.9 million in the same quarter prior year. The increase in revenues was attributable to improvements in new vehicle and used vehicle same store sales. Revenues exceeded the Zacks Consensus Estimate of $686.0 million.

Revenues from new vehicle retail increased 34.5% to $404.3 million from $300.6 million in the corresponding quarter last year. New vehicle same store sales increased 23.9% to 11,631 units in the quarter. Used vehicle revenues swelled 24.9% to $195.4 million on 15.6% rise in same store sales to 10,806 units. Revenue went up 16.2% to $34.3 million in the used vehicle wholesale business. Same-store unit sales went up 17.5% to 4,312 vehicles in the business.

Gross profit swelled 25.9% to $127.9 million or 17% of sales in the quarter from $101.6 million or 17.4% of sales in the first quarter of 2011. Meanwhile, operating income was $32 million or 4% of sales compared with $20 million or 3% in the year-ago quarter.

Lithia Motors had cash and cash equivalents of $8.9 million as of March 31, 2012, down from $20.9 million as of December 31, 2011. Total debt was $285.9 million as of March 31, 2012 compared with $286.9 million as of December 31. 2011. The company had an operating net cash outflow of $41.0 million compared to $11.2 million in the first quarter of 2011.

Lithia Motors expects earnings in the range of 60 cents to 62 cents per share for the second quarter of 2012 and $2.45 to $2.53 per share for the full year 2012. The company expects revenues between $2.9 billion and $3.1 billion for 2012, with 16% increase in new vehicle same store sales and 13% hike in used vehicle same store sales.

Lithia Motors is the ninth largest automotive retailer in U.S.With 83 stores in 11 states, the company provides 25 new vehicle brands along with all brands of used vehicle. It competes with AutoNation Inc. ( AN ) and Penske Automotive Group Inc. ( PAG )

Currently, the company retains a Zacks #1 Rank, which implies a Strong Buy rating for the short-term and we have an Outperform recommendation on the shares of the company for the long-term.

AUTONATION INC (AN): Free Stock Analysis Report
LITHIA MOTORS (LAD): Free Stock Analysis Report
PENSKE AUTO GRP (PAG): Free Stock Analysis Report
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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: AN , LAD , PAG

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