CEO Bryan DeBoer: "We have disposed of the majority of our assets with the lowest quality, which we are very enthusiastic about."
UPDATE: 10/24/18 15:50 ET – adds details
The net income of Lithia Motors Inc. increased in the third quarter, mainly due to gains from tax changes and divestments at stores. Profit in the financial and insurance sector, fixed activities and used vehicles increased. Sales also increased in the quarter.
The Medford, Oregon, dealer group reported a net income of $ 93.1 million in the third quarter, an increase of 79 percent from last year. This increase reflected the gains related to the sale of dealers and tax benefits in the third quarter of 2018, as well as costs related to store purchases and storm insurance reserves in the same quarter of the previous year. On an adjusted basis, net profit rose 25 percent to $ 68.7 million.
Lithia reported sales of $ 3.09 billion, up 15 percent from $ 2.68 billion the year ago.
Cooled off from a wave of acquisitions earlier this year, Lithia has now disposed of nine out of twelve stores for the year, seven of which in the third quarter.
"We have disposed of the majority of our assets with the lowest quality, and we are very enthusiastic about that", said CEO Bryan DeBoer to reporters during a call on Wednesday.
The share price of Lithia rose during the profit news, despite a downward day on Wall Street, with shares just before the close of trading 13.7 percent above the end of Tuesday.
Sales: total retail sales of new vehicles increased by 7.3 percent to 48,790. Sales of used vehicles increased by 15 percent to 39,751.
In the same store sales: the retail sales of new vehicles fell by 5.1 percent to 40,974. This is comparable to a worldwide decrease in light vehicle sales of 2.5 percent during the quarter. The retail trade in used vehicles increased by 2.8 percent to 34,434.
Records: sales were highest for a third quarter in company history.
Gross profit in the same store: 2.4 percent higher to $ 129.7 million for parts and service; 8.7 percent to $ 105.5 million for F & I; a decrease of 1.1 percent to $ 82.6 million for the sale of new vehicles; an increase of 1.1 percent to $ 77.7 million for the retail trade in used vehicles.
Lithia is number 4 on the list of Automotive News of the 150 largest dealer groups in the United States, with annual retail sales of new vehicles in 167,146 in 2017.