Send me real-time posts from this site at my email

Lithia (LAD) Up 4.2% Since Solid Q1 Earnings & Dividend Hike

Lithia Motors LAD extended its rally for the third straight day on Apr 23, following first-quarter 2021 earnings release on Apr 21. Shares of the company increased 4.2% on the back of stellar results. Not only did the auto retailer post a comprehensive beat, it also recorded higher year-over-year earnings and revenues. Investors were also encouraged by the fact that the company hiked dividend payout.

It reported first-quarter 2021 adjusted earnings of $5.89 per share, which beat the Zacks Consensus Estimate of $4.73. Higher-than-expected revenues across all units but one led to the outperformance. The bottom line increased a whopping 193% from the prior-year quarter’s $2.01 per share. Total revenues also rose 54.9% year over year to $4,343 million. Moreover, the top line surpassed the Zacks Consensus Estimate of $3,865 million. In fact, for the reported quarter, Lithia Motors claims to have reported the highest quarterly earnings and revenues in its history.

Segmental Performance

New vehicle retail revenues increased 59.7% year over year to $2,193.2 million and topped the Zacks Consensus Estimate of $1,959 million. New vehicle units sold climbed 50% from the prior-year quarter to 53,864. The average selling price of new-vehicle retail rose 6.4% from the prior-year quarter to $40,718.

Used-vehicle retail revenues rose 54.6% year over year to $1,352.2 million and beat the Zacks Consensus Estimate of $1,211 million. Used-vehicle retail units sold grew 38.5% from the year-ago quarter to 59,027. The average selling price of used-vehicle retail improved 11.7% to $22,907 from the year-ago figure of $20,510. Revenues from used-vehicle wholesale surged 102.7% year over year to $135.2 million and surpassed the consensus mark of $92 million.

Revenues from service, body and parts were up 22.5% from the prior-year period to $404 million but fell shy of the Zacks Consensus Estimate of $416 million. The company’s F&I (Finance & Insurance) business recorded 62.8% year-over-year growth in revenues to $198.4 million, topping the consensus estimate of $179 million. Revenues from fleet and others were $60 million, which increased 60.4% year over year, surpassing the consensus mark of $43.36 million.

While same-store new vehicle sales rose 29.4% year over year, same-store used vehicle retail sales increased 32%. While same-store revenues from the F&I business soared 29.7%, that of the service, body and parts unit dropped 1% from the prior-year quarter.

Financial Tidbits

Cost of sales increased 54.8% year over year for first-quarter 2021. However, SG&A — as a percentage of gross profit — decreased from the prior-year level. Encouragingly, pretax and net profit margins improved from the year-ago levels.

Bringing in pleasant news for investors, the board approved a dividend increase of 12.9% from the prior payout. Quarterly dividend of 35 cents a share will be payable on May 21 to shareholders of record as of May 7, 2021.

Lithia had cash and cash equivalents of $170.3 million as of Mar 31, 2021. Long-term debt was $2,124 million, marking an increase from $2,064.7 million as of Dec 31, 2020.

Lithia — which shares space with other auto retailers like Asbury Automotive Group Inc. ABGAmericas CarMart Inc. CRMT and Group 1 Automotive Inc. GPI — currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Zacks' Top Picks to Cash in on Artificial Intelligence

In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.

See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Americas CarMart, Inc. (CRMT): Free Stock Analysis Report
Lithia Motors, Inc. (LAD): Free Stock Analysis Report
Group 1 Automotive, Inc. (GPI): Free Stock Analysis Report
Asbury Automotive Group, Inc. (ABG): Free Stock Analysis Report
To read this article on click here.
Zacks Investment Research

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue