Lithia Motors' Q4 net income rises four-fold to $18.7 million
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DETROIT (Reuters) -- Lithia Motors Inc. said today its fourth-quarter net income surged four-fold, let by a 41 percent rise in new vehicle revenue.
Net income for the fourth quarter was $18.7 million, or 71 cents per share, compared with $4.4 million, or 16 cents per share a year earlier.
Fourth-quarter income from continuing operations was $13 million, or 49 cents per share, the company said in a statement. The results beat Wall Street analyst expectations of 38 cents per share.
Income from continuing operations was reduced to exclude the benefit of the sale of real estate, an offset for a noncore reserve adjustment and a noncore charge on asset impairments and reserve adjustments.
Lithia forecast first-quarter earnings of 41 cents to 43 cents per diluted share, up from its earlier forecast of 37 cents to 39 cents per share.
Its full-year 2012 forecast of $2.06 to $2.16 per diluted share is up from its previous forecast of $1.95 to $2.05 per share.
Lithia said it expects 2012 revenue to rise to $2.9 billion to $3.1 billion, up 7 percent to 15 percent from 2011 revenue. Same-store new vehicle sales are seen rising 10.8 percent in 2012, Lithia said.
Domestic gains
Unlike most large U.S. auto dealer groups, cars and trucks made by U.S. automakers account for most of Lithia's new-vehicle sales. Chrysler Group LLC made up nearly a third of its new-vehicle revenue in 2011. Chrysler saw a 2011 U.S. sales gain of 24 percent, outstripping the industry's gain of 10 percent.
CEO Sid DeBoer, in the company's earnings statement, said he expects U.S. light vehicle sales to rise for the next several years due to an aging U.S. auto fleet, more available credit, higher scrappage rates, and better new products with higher gasoline efficiency.
Industry market analyst Polk says the average age of the 240.5 million cars and trucks registered in the United States was a record 10.8 years, 10 percent older than in 2007.
Chris Holzshu, chief financial officer, said Lithia lowered its sales, general and administrative expenses as a percentage of gross profit by 530 basis points to 72.9 percent in 2011. He said Lithia has a goal of SG&A expenses to gross profit near 70 percent in 2012.
Change at the top
Lithia also said today that DeBoer will step down as CEO on May 1 and will be succeeded by his son, COO Bryan DeBoer.
Sid DeBoer, 68, will assume the role of executive chairman and remain chairman of the board of the company, based in Medford, Ore.
Bryan DeBoer, 44, has served as president and COO since 2007, and has been "directly responsible for Lithia's operational performance," the company said in a statement.
Lithia became a publicly traded company in 1996. It has 86 auto stores in 11 states, mainly in the U.S. West. Texas and Oregon stores combined in 2011 to account for 45 percent of Lithia's revenue.
Lithia ranks No. 9 on the Automotive News list of the top 125 dealership groups in the United State with 2010 new-vehicle sales of 33,790 units.
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