Lithia Motors Inc. reported net earnings of $9.79 million in the third quarter, a 71.4 percent jump year-over-year. The company's third-quarter revenues rose 14.7 percent to $582.7 million.
The company linked the strong results to an improved brand mix, operating efficiencies, as well as increases in high-margin businesses used vehicle sales, finance and insurance and service and parts.
It's also seeing higher demand for trucks and domestic brands, which are important to its many rural, single-point stores.
Lithia posted a 12 percent increase in same-store sales -- sales for stores operated for at least one year -- including an 8 percent increase in new-vehicle sales. Lithia's stores saw healthy increases despite difficult comparisons with sales during the time the federal cash-for-clunkers incentives were in effect.
The most glowing results came in the used-vehicle department. Same-store sales for used vehicles rose 20 percent during the third quarter. President Bryan DeBoer boasted that the company sells slightly more used vehicles than it does new vehicles and has made significant strides retailing the seven-year-plus vehicle with mileage of 80,000 or more.
“Those are vehicles we would have wholesaled,” DeBoer told analysts during its conference call earlier Wednesday.
The company now intends to turn its attention to vehicles between three and seven years old. “The opportunities are now dramatic in that middle-market car,” said DeBoer.
Lithia also saw gains in its parts and service business, as budget-conscious customers who postponed work on their vehicles last year returned to the shop for service.
For the first nine months of the year, Lithia reported $9.34 million in net earnings on revenue of $1.58 billion. During that period net earnings were down 12.8 percent year over year, though revenues were up 16.2 percent.