Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Lithia Motors Shares Stalled Out

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Lithia Motors (NYSE: LAD  ) , an automotive retailer, fell as much as 11% after reporting its fourth-quarter earnings results.

So what: For the quarter, Lithia reported phenomenal results. Revenue rose 26% to $877.4 million as new vehicle same-store sales spiked 31% and used vehicle same-store sales advanced 20%. Quarterly profit rose 52% to $0.74 from the previous year. Both figures handily surpassed the $0.66 in EPS and $824.9 million Wall Street had been expecting. For 2013, Lithia is forecasting revenue of $3.7 billion to $3.8 billion, and EPS of $3.25 to $3.35. Current consensus estimates pegged Lithia at $3.66 billion in revenue and $3.26 in EPS.

Now what: Mr. Market seems to be unhappy with Lithia's historically conservative guidance, especially after reporting those aforementioned robust same-store sales figures. Keep in mind that Lithia has now crushed estimates by double digits in at least the past five quarters, so being conservative with its guidance isn't necessarily a bad thing. What'll be important for Lithia is if it can translate lower household incomes for consumers resulting from the payroll tax into consistent growth on its end. Based on its recent results, I'd say it's quite possible.

Craving more input? Start by adding Lithia Motors to your free and personalized Watchlist so you can keep up on the latest news with the company.

One company driving over the competition
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the brand-new free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2266890, ~/Articles/ArticleHandler.aspx, 9/24/2016 8:53:21 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 23 hours ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/23/2016 4:02 PM
LAD $91.80 Down -1.39 -1.49%
Lithia Motors CAPS Rating: ****