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Lithia Motors (LAD) Q4 Earnings Top Estimates, Up 85% Y/Y

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Zacks Equity Research
·3 min read
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Lithia Motors (LAD) reported fourth-quarter 2020 adjusted earnings of $5.46 per share, which beat the Zacks Consensus Estimate of $5.05. Higher-than-expected revenues across all units but one led to the outperformance. The bottom line also increased a whopping 85% from the prior-year quarter’s $2.95 per share. Total revenues rose 20.6% year over year to $3,941.8 million. Moreover, the top line surpassed the Zacks Consensus Estimate of $3,921 million. In fact, for the reported quarter, Lithia Motors claims to have reported the highest quarterly revenues in the company's history.

Lithia Motors, Inc. Price, Consensus and EPS Surprise

Lithia Motors, Inc. Price, Consensus and EPS Surprise
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 19% year over year to $2,149.4 million and topped the Zacks Consensus Estimate of $2,114 million. New vehicle units sold climbed 13% from the prior-year quarter to 52,469. The average selling price of new-vehicle retail rose 5.4% from the prior-year quarter to $40,965.

Used-vehicle retail revenues rose 23.9% year over year to $1,108.7 million and beat the Zacks Consensus Estimate by a whisker. Used-vehicle retail units sold grew 11.7% from the year-ago quarter to 47.731. The average selling price of used-vehicle retail improved 11% to $23,229 from the year-ago figure of $20,934. Revenues from used-vehicle wholesale surged 35.6% year over year to $91.8 million and surpassed the consensus mark of $78 million.

Revenues from service, body and parts were up 15.7% from the prior-year period to $383.9 million but fell shy of the Zacks Consensus Estimate of $387 million. The company’s F&I (Finance & Insurance) business recorded 26.9% year-over-year growth in revenues to $172.6 million, marginally topping the consensus estimate of $170 million. Revenues from fleet and others were $35.4 million, which increased 7.3% year over year, and surpassed the consensus mark of $31.70 million.

While same-store new vehicle sales edged up 0.4% year over year, same-store used vehicle retail sales increased 8.5%. While same-store revenues from the F&I business rose 3.9%, the same from the service, body and parts unit dropped 2.8% from the prior-year quarter.

Financial Tidbits

Cost of sales increased 18.9% year over year for fourth-quarter 2020. SG&A, as a percentage of gross profit, increased from the prior-year level. Nonetheless, pretax and net profit margins improved from the year-ago levels.

Quarterly dividend of 31 cents a share will be payable on Mar 26 to shareholders of record as of Mar 12, 2021.

Lithia had cash and cash equivalents of $160.2 million as of Dec 31, 2020. Long-term debt was $2,064.7 million, marking an increase from $1,430 million as of Dec 31, 2019.

Lithia — which shares space with other auto retailers like Asbury Automotive Group Inc. (ABG), Americas CarMart Inc. (CRMT) and Group 1 Automotive Inc. (GPI) — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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