Lithia Motors Inc.'s first-quarter net income rose 2.6 percent over the year-ago period driven by gains in service and parts and finance and insurance revenues and used-vehicle volumes, partly offset by lower used-vehicle gross profit margins.
Same-store sales were flat, while same-store gross profit grew in all operations except new- and used-vehicle retail sales.
Net income increased to $52.1 million, while revenue rose 19 percent to $2.66 billion from a year earlier, the dealership group said Wednesday. Year-earlier net was boosted by a $9.1 million extraordinary gain from legal settlements with automakers.
"Vehicle sales improved sequentially each month of the quarter," CEO Bryan DeBoer said in a statement on Wednesday. "January and February were softer than expected, and we experienced more severe weather than typical in the Northeast throughout the quarter. Despite the slower start, we finished strong with a record March, generating over 70 percent of our earnings" for the quarter. "We expect this momentum to continue throughout 2018 and beyond."
Sales: New-vehicle sales rose 17 percent to 41,497 units, due in part to several acquisitions Lithia has made. Used-vehicle retail sales climbed 17 percent to 36,114.
Same-store sales: New-vehicle sales fell 4.3 percent to 33,886, well below the industry's 2 percent increase in first-quarter U.S. light-vehicle sales, while used-vehicle retail sales rose 4.2 percent to 31,677.
Records: Revenue of $2.66 billion was a first-quarter record.
During the quarter, Lithia acquired Honda and Acura points in Buffalo, N.Y., the Day Group in Pittsburgh and six stores from the Prestige Family of Fine Cars in New Jersey. In April, it bought Broadway Ford in Idaho Falls, Idaho, and Buhler Ford in Eatontown, N.J. It also sold a Mitsubishi store in April and a Mazda-Volvo store in the first quarter, both in Fresno, Calif. Lithia estimates its new locations will add $1.4 billion in annualized revenue.
The company raised its quarterly dividend 2 cents a share to $0.29.
Lithia, of Medford, Ore., is ranked No. 4 on Automotive News' list of the top 150 dealership groups based in the U.S., with annual new-vehicle retail sales of 167,146 in 2017.
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