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MEDFORD, Ore. - On Tuesday, Lithia & Driveway (NYSE:LAD) reported second-quarter adjusted earnings that significantly exceeded analyst expectations as the auto retailer demonstrated strong profitability despite challenging market conditions.
The company’s shares were up 1.63% in pre-market trading following the release.
The company posted adjusted earnings per share of $10.24 for the second quarter, handily beating the analyst estimate of $9.14. Revenue reached $9.58 billion, slightly below the consensus estimate of $9.59 billion but still representing a 4% increase compared to $9.2 billion in the same period last year.
Net income for the quarter rose 19.2% to $258 million, while adjusted net income increased 24% to $268 million compared to the second quarter of 2024. The company’s total gross profits improved 4.3% YoY, with particularly strong performance in aftersales operations, which saw gross profit jump 11.5%.
"Building on continued strength across our core operations, Lithia & Driveway’s differentiated design once again powered record performance in the second quarter as we delivered a 25% year-over-year increase in diluted EPS," said Bryan DeBoer, President and CEO. "Operational excellence across the business translated into robust growth."
The company’s financing operations showed remarkable improvement, generating $20 million in profitability, a 179% increase YoY. Driveway Finance Corporation originated $731 million in loans, with U.S. penetration increasing to 14.8%.
Lithia continued its expansion strategy, acquiring two Mercedes-Benz (OTC:MBGAF) stores in Tennessee and Mississippi in June, adding $220 million in expected annualized revenue. Year-to-date, the company has acquired businesses representing $400 million in expected annualized revenues.
The company’s board approved a dividend of $0.55 per share for the second quarter, payable on August 22 to shareholders of record on August 8. During the quarter, Lithia repurchased approximately 387,000 shares at a weighted average price of $306.
The auto retailer ended the quarter with approximately $1.3 billion in cash, cash equivalents, marketable securities, and availability on revolving lines of credit, maintaining a strong balance sheet to support future growth initiatives.
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