Lithia revenue grows, but company still posts loss for quarter

Lithia Motors continued building steam in the second quarter of the year as revenue rose 19 percent to $534 million from $444 million a year earlier.

While the Medford-based auto retailer's vehicle sales numbers improved, its real estate holdings bit into the bottom line.

Same-store retail new-vehicle sales grew 26 percent and used-vehicle sales increased 15 percent as Lithia's continuing operations netted 27 cents per share, compared to 22 cents a year ago.

However, real estate issues led to a $1.5 million, or 6-cent-per-share, loss for the quarter compared to a $2.5 million, or 12-cent-per-share, profit for the second quarter of 2009.

"Our operational results exceeded our expectations due to a strong April and May," said Sid DeBoer, Lithia's chairman and chief executive officer in releasing the earnings report. "We have focused on maintaining our service, body and parts sales volumes despite fewer units in operation and lower warranty revenues."

Lithia charged off $8 million related to its real estate holdings that the company said reflected continued weakness in local market conditions, increasing vacancy rates and challenges in obtaining lender financing.

"Selling our remaining non-operating real estate allows us to mitigate risk and redeploy the capital generated," said President and Chief Operating Officer Bryan DeBoer in a statement. "We are acting aggressively to price these assets to sell considering updated market conditions. While it is difficult to sell these assets in the current environment, we believe that it is an attractive time for other investment opportunities."

For the six-month period ending June 30, Lithia's revenue increased 17 percent to $993 million, compared to $849 million for the same period in 2009.

— Greg Stiles

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