Lithia Motors Q1 Results Beat Estimates, Hikes Divided; But Outlook Disappoints

(RTTNews) - Lithia Motors, Inc. (LAD), an automotive franchise and a retailer of new and used vehicles, reported a slight decline in profit for the first quarter despite higher revenues.

Both adjusted earnings and revenue for the quarter beat analysts' estimates. However, the company forecast earnings for the second quarter and fiscal 2016 below analysts' expectations. The company's board of directors approved a 25 percent increase in the quarterly dividend.

For the first quarter, the company's net income was $40.3 million, or $1.55 per share, compared to $40.7 million, or $1.53 per share in the year-ago period.

The latest quarter's results include a non-core benefit related to an equity investment and the gain on the sale of a store offset by a legal reserve adjustment. These non-core items result in no change to earnings per share.

Adjusted earnings for the quarter were $1.55 per share, compared to $1.39 per share in the year-ago period. On average, analysts polled by Thomson Reuters expected the company to earn $1.54 per share. Analysts' estimates typically exclude special items.

Revenue for the quarter increased 11 percent to $2.0 billion from $1.8 billion for the same period last year. Analysts had a consensus revenue estimate of $1.96 billion.

The company's board of directors has approved a 25 percent increase in the quarterly dividend to $0.25 per share, related to first quarter 2016 financial results. The company expects to pay the dividend May 27, 2016 to shareholders of record on May 13, 2016.

Looking ahead to the second quarter, the company forecast earnings of $1.86 to $1.90 per share. The Street expects earnings of $2.04 per share for the quarter.

For fiscal 2016, the company forecast earnings of $7.30 to $7.50 per share on total revenues of $8.5 billion to $8.6 billion. Analysts expect the company to earn $7.67 per share for the year on revenues of $8.59 billion.