Shares of Lithia Motors Inc. (NYSE:LAD), one of the largest auto dealership groups in the U.S. with roughly 182 nationwide locations, were up more than 16% as of 12:15 p.m. EDT Wednesday, after the company delivered a better-than-expected third-quarter earnings report before the bell.
Lithita Motors' Q3 revenue checked in at $3.09 billion, well above the $2.69 billion it took in a year earlier, but still just below analysts' consensus estimate. The bottom-line figure of $2.83 in adjusted earnings per share, however, topped the prior year's $2.18 mark and also beat analysts' expectations for $2.58 per share. Total same-store sales during Q3 rose a modest 1% from the prior-year period.
"We achieved record results in the third quarter driven by strong top line growth," said President and CEO Bryan DeBoer in a press release. "Total revenue and gross profit both increased over 15%, and adjusted EPS grew 30%. We are seeing traction in realizing the over $250 million of store earnings potential as operations continue to season and stabilize."
Lithia's reach includes roughly 80% of consumers in the U.S., but with the domestic automotive market slowing after almost a decade of rising sales, automakers and dealerships must find creative ways to drive growth. One example is the partnership Lithia inked in Q3 with Shift Technologies, a digital purchase and selling platform that provides vehicle pickup and delivery to a customer's location. But further innovations will be needed.