Lithia Motors, Inc. (LAD) started the fourth quarter on a strong note, reporting third-quarter adjusted earnings per share of $8.21, surpassing analysts’ consensus estimate of $7.60. This positive performance was fueled by a combination of factors, including strong revenue growth across several key segments.
Despite missing the Street’s revenue expectations, Lithia’s sales still rose a respectable 11% year-over-year, reaching $9.221 billion. The company’s New vehicle retail segment saw a robust 14% increase, while Used vehicle retail and wholesale grew by 8.5% and 23.7%, respectively. The Aftersales segment also contributed significantly, reporting a 20.9% increase in revenue.
Lithia’s commitment to expansion continued in the third quarter, with the company acquiring three stores from Duval Motor Company in Jacksonville and Gainesville, Florida. This strategic move strengthens Lithia’s presence in the import and luxury segments in Florida, extending the company’s retail network geographically. These acquisitions contribute to Lithia’s impressive achievement of over $5.9 billion in annualized revenues from acquisitions so far this year.
Beyond its core automotive operations, Lithia Motors’ financial arm, Driveway Finance Corporation (DFC), originated $518 million in loans during the quarter, bringing its total portfolio to $3.8 billion. The company ended the third quarter with a robust cash position of approximately $1.1 billion.
To reward shareholders, Lithia Motors approved a dividend of 53 cents per share related to the third quarter’s financial results. The dividend is slated to be paid on November 15 to shareholders of record on November 8. Additionally, Lithia continued its share repurchase program, buying back approximately 986,000 shares at a weighted average price of $260. Under the current authorization, the company has approximately $560.9 million remaining for future buybacks.
The positive financial results and expansionary moves have been well-received by the market, with LAD shares trading higher by 2.788% to $313.01 in premarket trading on Wednesday. Investors seem to be optimistic about Lithia’s future prospects, driven by its solid performance and continued commitment to growth.