DETROIT (Reuters) -- Car dealership group Lithia Motors Inc. on Tuesday posted a better-than-expected 17 percent rise in quarterly earnings on improved profit margins and raised its full-year profit forecast.
Lithia reported second-quarter earnings of $12.68 million, or 60 cents a share, up from $10.8 million, or 54 cents a share, a year earlier.
Excluding the effect of an accounting change and discontinued operations, the company earned 65 cents a share. Wall Street analysts were expecting 58 cents.
"The second quarter was marked by same-store sales growth across all business lines, cost savings and margin improvements in the used retail and parts and services businesses," Lithia's chairman and chief executive, Sid DeBoer, said in a statement.
Revenue increased 13 percent, to $762.4 million from $677 million in the same period last year.
Prudential Equity Group analyst John Tomlinson said in a note to clients that acquisitions added 8.4 percent to revenue growth.
Lithia said that so far this year it had completed acquisitions worth about $200 million in annual revenue. It said it plans to acquire more dealerships in the second half of the year.
Medford, Oregon-based, Lithia now expects earnings per share of $2.29 to $2.34 for 2005, up slightly from a previous forecast of $2.25 to $2.33.
For the third quarter, it forecast profit per share of 73 cents to 75 cents.
The outlook includes the effect of an accounting change that increases the number of shares outstanding.
Tomlinson said the full-year outlook appears conservative.
Lithia is eighth on the Automotive News ranking of top dealer groups in the United States in 2004 with 99,717 total vehicles sold.