Lithia has best second quarter since 2006

Lithia Motors Inc. shook off the residual effects of the Japanese earthquake and tsunami that threatened to disrupt American auto dealers, as well as domestic economic uncertainties to achieve its best second quarter since 2006. The Medford-based auto retailer Wednesday reported earnings of $14.6 million, or 54 cents per share, during the second quarter, while revenue rose 30 percent to $689.1 million, compared with $530.2 million a year ago.

In 2010, Lithia's adjusted second quarter net income was $7 million, or 27 cents per share.

Analysts had expected Lithia earnings to come in at 35 cents per share.

"We had a better-than-expected quarter," said Sid DeBoer, Lithia's chairman and chief executive officer. "The outlook for the remainder of 2011 remains volatile. Gas prices have fluctuated over the past three months, unemployment remains high and the supply disruption that affected Japanese manufacturers will reduce vehicle availability through the third quarter."

However, DeBoer said, the nation's ninth-largest dealership group anticipates new-vehicle inventory will recover to normal levels by the first quarter of 2012.

"We continue to build on the momentum we have created over the past 24 months," he said.

During the quarter, Lithia's new-vehicle, same-store sales increased 24 percent, used-vehicle, retail, same-store sales increased 16 percent and its service, body and parts same-store sales increased 5 percent.

For the first six months of 2011, the company's revenue increased 31 percent to $1.3 billion compared to $1 billion in the first half of 2010. Same-store new-vehicle sales increased 32 percent, used-vehicle, retail, same-store sales increased 17 percent and service, body and parts same-store sales increased 7 percent. For the first six months of 2011, adjusted per share net income was 88 cents compared to 36 cents in the first half of 2010.

Lithia ended the period with $61 million in immediately available funds, including $12 million in cash, $8 million in availability on its revolving credit facility and $41 million in unfinanced new-vehicle inventory.

The auto retailer also announced a 7 cents second-quarter dividend to be paid on Aug. 25, 2011, to shareholders of record on Aug. 11.

Lithia now expects earnings in the range of $1.67 to $1.73 a share for 2011, up from its previous forecast of $1.42 to $1.50. Analysts were expecting $1.48.

The company raised its forecast for 2011 revenue by $100 million to a range of $2.6 billion to $2.7 billion. Analysts were expecting $2.55 billion.

Lithia shares on the New York Stock Exchange rose to 23.84 during midday trading before settling back to 21.53, a 20-cent drop.

Reach reporter Greg Stiles at 541-776-4463 or email

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