Please ensure Javascript is enabled for purposes of website accessibility

Lithia Motors Beats on Both Top and Bottom Lines

By Seth Jayson – Updated Apr 10, 2017 at 2:22PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Just the facts, Fool.

Lithia Motors (NYSE: LAD) reported earnings on Feb. 20. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Lithia Motors beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue increased significantly. Non-GAAP earnings per share grew significantly. GAAP earnings per share expanded.

Margins contracted across the board.

Revenue details
Lithia Motors reported revenue of $877.4 million. The seven analysts polled by S&P Capital IQ wanted to see revenue of $820.7 million on the same basis. GAAP reported sales were 28% higher than the prior-year quarter's $685.9 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.74. The nine earnings estimates compiled by S&P Capital IQ averaged $0.66 per share. Non-GAAP EPS of $0.74 for Q4 were 54% higher than the prior-year quarter's $0.48 per share. (The prior-year quarter included $0.09 per share in earnings from discontinued operations.) GAAP EPS of $0.76 for Q4 were 7.0% higher than the prior-year quarter's $0.71 per share. (The prior-year quarter included $0.09 per share in earnings from discontinued operations.)

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 15.8%, 50 basis points worse than the prior-year quarter. Operating margin was 4.2%, 30 basis points worse than the prior-year quarter. Net margin was 2.3%, 40 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $832.4 million. On the bottom line, the average EPS estimate is $0.70.

Next year's average estimate for revenue is $3.65 billion. The average EPS estimate is $3.26.

Investor sentiment

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Lithia Motors is outperform, with an average price target of $41.90.

The rich are different than you and me: They might not notice the moneymaking stories right under our noses. In our new report, "Middle-Class Millionaire-Makers: 3 Stocks Wall Street's Too Rich to Notice," we give you three Peter Lynch-inspired buy-what-you-know stocks for the 99%. Click here for instant access to this free report.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Stocks Mentioned

Lithia Motors Stock Quote
Lithia Motors
LAD
$221.40 (-0.55%) $-1.23

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.