Lithia Motors (LAD) announced a profit of $7.2 million or 33 cents per share, before special items, in the third quarter, an improvement from $1.45 million or 7 cents per share in the year-ago period. This was attributed to increased sales due to the U.S. Government’s “Cash for Clunkers” cash incentive program for fuel-efficient vehicles. The auto retailer managed to nearly meet the Zacks Consensus Estimate of 34 cents per share.
Revenues in the quarter declined 10% to $458 million driven by lower new vehicle sales. New vehicle sales fell 15% to $242 million while used vehicle sales remained almost flat at $136 million. Same store new vehicle sales declined 14.3% while used vehicle sales increased 3.9% on a year-over-year basis.
Lithia’s gross profit margin increased 190 basis points to 18.7%. New vehicle margin rose 110 basis points to 8.8%, used vehicle retail margin elevated 490 basis points to 15.3% and used vehicle wholesale margin went up 510 basis points to 0.4%.
Lithia had cash and cash equivalents of $4.4 million as on Sept 30, 2009. Long-term debt amounted to $214 million as on that date. The long-term debt to capitalization ratio stood at 45%. In the first nine months of 2009, the company had a net cash flow of $81 million from operating activities.
Lithia Motors is a Medford, Oregon-based automotive franchisee and retailer of 27 brands of new and all brands of used vehicles at 87 stores, which are located in 12 states. It sells new and used cars, light trucks and replacement parts. It also provides vehicle maintenance, warranty, and paint and repair services, besides offering finance, service contracts, protection products and credit insurance.
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