Lithia Motors Earnings Preview

Watch Lithia Motors' (NYSE: LAD  ) earnings report to see whether it can beat analyst expectations for the fifth consecutive quarter. The company will unveil its latest earnings on Wednesday, July 27. Lithia Motors is an operator of automotive franchises and retailer of new and used vehicles and services. It sells new and used cars and light trucks; sells replacement parts; and provides vehicle maintenance, warranty, paint, and repair services.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Lithia Motors, with three of four rating it a buy and the remainder rating it a hold. Analysts like Lithia Motors better than competitor Sonic Automotive overall. That rating hasn't budged in three months, as analysts have remained steadfast in their opinion of the stock.
  • Revenue forecasts: On average, analysts predict $635.5 million in revenue this quarter. That would represent a rise of 19% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.35 per share. Estimates range from $0.33 to $0.40.

What our community says:
CAPS All-Stars are solidly backing the stock, with 78.8% giving it an "outperform" rating. The majority of the Fools are in agreement with the All-Stars, as 74.4% give it an "outperform" rating. Fools are bullish on Lithia Motors, though the message boards have been quiet lately, with only 51 posts in the past 30 days. Lithia Motors' bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters. 

Quarter Q1 Q4 Q3 Q2
Gross Margin 17.4% 17.1% 18% 17.9%
Operating Margin 3.4% 2.3% 4% 0.6%
Net Margin 1.4% 0.8% 1.7% -0.3%
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