What happened?
Shares of Lithia Motors Inc. (LAD 4.08%), a retailer of new and used vehicles and transportation services, were sliding 12% as of 11:50 a.m. EDT Wednesday after the company released weaker than expected second-quarter earnings.
So what
Starting from the top, the automotive dealer chain recorded revenue of $3.1 billion during the second quarter, which was a solid 26% gain over the prior year's result, but just shy of analysts' estimates, per Zacks Investment Research. Adjusted earnings per share checked in at $2.52, well below estimates calling for $2.98.
Image source: Getty Images.
"Our stores generated strong revenue growth, both overall and on a same-store basis," CEO Bryan DeBoer said in a press release. "Total gross profit increased over 20%, and our service operations performed well. We continue to attack the over $250 million in dry powder available in both revenue and cost management as operations season and stabilize. At the same time, we are targeting further acquisition growth and continue to invest in innovation and digital initiatives for the future."
Now what
The data wasn't all bad, with online traffic up 35% during the second quarter, compared to the prior year; total retail units increased 21% and total same-store sales gained 3%. Management updated its full-year outlook for revenues to between $11.75 billion to $12.25 billion and EPS of $9.50. Investors will be watching to see if management can bump its adjusted earnings to match estimates during the back half of 2018.
