Lithia Motors Inc.'s revenue and earnings per share reached second-quarter records as net income jumped nearly fourfold on soaring new- and used-vehicle sales, higher gross vehicle profits and improved finance and insurance profits.
Net income totaled $304.9 million, up from $77.7 million in the same 2020 quarter that saw showrooms temporarily close and business slow during the early days of the coronavirus pandemic. Revenue more than doubled to $6 billion.
Adjusted net income also more than tripled to $315.5 million, up from $85.5 million in the quarter ended June 30, 2020. The adjusted results in this quarter included 37 cents a share of charges for acquisition costs, a net loss on the sale of dealerships and insurance reserves that Lithia said were somewhat offset by a gain in an investment.
Results in the year-earlier quarter included 34 cents a share of charges for asset impairment, insurance reserves and acquisition costs, partially offset by a gain in dealership sales and taxes.
"Our team's high performance, alongside the robust, demand-driven retail environment in the second quarter, resulted in same-store revenue growth of 20 percent for new vehicles, 49 percent for used vehicles, 39 percent for F&I and 3 percent for service, body and parts compared to 2019," Lithia CEO Bryan DeBoer said in a statement on Wednesday.
Shares of Lithia, which climbed 5.9 percent Tuesday ahead of the release, rose 7.7 percent to $383.02 in morning trading Wednesday.
During the quarter, Lithia acquired numerous dealerships that combined are expected to generate annual revenues of $3.7 billion. The largest transaction was Michigan's Suburban Collection, a huge 34-store deal that closed in April and is one of the largest-ever dealership acquisitions.
It also acquired a Honda store in New Jersey, three Hyundai dealerships and a Genesis store in Las Vegas, BMW and Acura dealerships in California, five Kia stores in Texas, a Toyota store in Mississippi and Toyota and Subaru dealerships in Washington.
The retailer also sold stores including Hazleton Honda in Pennsylvania and Audi Valencia in California.
"With 40 percent of our targeted $20 billion revenue acquired in the first year of our five-year plan, we are well ahead of schedule and are only getting started," DeBoer said in the statement.