LITHIA MOTORS Reports 14.9% Decrease in Revenue for FY2022 Q4, But Net Income Increases 10.8% Year-Over-Year

Earnings report

On December 31 2022, LITHIA MOTORS ($NYSE:LAD) reported their earnings results for FY2022 Q4, which ended on February 15 2023. The report showed that total revenue for the fourth quarter was USD 247.7 million, a decrease of 14.9% compared to the same period the previous year. Despite the decrease in revenue, however, LITHIA MOTORS reported a 10.8% increase in net income for the fourth quarter. This increase in net income is attributed to cost cutting initiatives such as streamlining business operations and restructuring sales practices.

Overall, although LITHIA MOTORS faced a decrease in revenue, the company performed better than expected and was able to increase their net income by 10.8%. This is a testament to their effective cost cutting and restructuring measures that have allowed them to maintain a strong level of profitability despite the challenging economic climate.

Market Price

On Wednesday, LITHIA MOTORS reported financials for the fourth quarter of their fiscal year 2022. The stock opened that day at $262.3, but ended the day 8.2% lower than the previous closing price of $281.3, down to $258.1. The lower revenue in Q4 is likely due to the economic impacts of the ongoing pandemic, and the decrease to stock price is most likely attributed to investor reactions given that the financial results were not as strong as anticipated.

The impressive increase in net income despite this downturn could mean that LITHIA MOTORS has been able to weather the storm through streamlining their operations and cost control measures. With many companies struggling under the current circumstances, LITHIA MOTORS has proven to be a resilient business. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Lithia Motors. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Lithia Motors. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Lithia Motors. More…

Key Ratios Snapshot

Some of the financial key ratios for Lithia Motors are shown below. More…

Analysis

GoodWhale conducted an analysis of LITHIA MOTORS’s financials and found that it is classified as a ‘gorilla’, a type of company that has achieved stable and high revenue or earning growth due to its strong competitive advantage. This is evidenced by its high scores in our Star Chart, particularly in its dividends, growth, and profitability categories. It is also medium in terms of assets. Furthermore, GoodWhale’s health score for LITHIA MOTORS is 7 out of 10. This high score suggests that LITHIA MOTORS is capable of sustaining future operations in times of crisis due to its strong cash flows and low debt. As such, LITHIA MOTORS may be attractive to investors seeking a secure and long-term investment opportunity. More…

Peers

Lithia Motors Inc, AutoNation Inc, Group 1 Automotive Inc, and Penske Automotive Group Inc are all leading automotive retailers. They each have a large network of dealerships and offer a wide range of vehicles. These companies compete in terms of price, selection, and customer service.

– AutoNation Inc ($NYSE:AN)

AutoNation is the largest automotive retailer in the United States. The company operates over 300 dealerships across the country, selling both new and used cars. AutoNation is also a leading provider of vehicle finance and insurance products. The company’s market cap is 5.47B as of 2022, and its ROE is 56.13%. AutoNation is a publicly traded company, listed on the New York Stock Exchange under the ticker symbol AN.

– Group 1 Automotive Inc ($NYSE:GPI)

Group 1 Automotive Inc is a publicly traded automotive retailer that offers a range of automotive products and services, including new and used vehicles, financing, insurance, and parts and service. As of 2022, the company had a market capitalization of 2.53 billion and a return on equity of 32.9%. Group 1 Automotive is a leading provider of automotive products and services in the United States, with over 100 dealerships across the country. The company offers a wide variety of vehicles, including sedans, SUVs, trucks, and vans. In addition to selling vehicles, Group 1 Automotive also provides financing, insurance, and parts and service. The company has a strong reputation for customer service and is committed to providing a positive experience for all of its customers.

– Penske Automotive Group Inc ($NYSE:PAG)

Penske Automotive Group Inc is an American automotive retailer with a market cap of 7.28B as of 2022 and a ROE of 29.75%. The company operates in the United States, United Kingdom, and Australia. It sells and services vehicles through its dealerships.

Summary

L i t h i a M o t o r s r e p o r t e d t o t a l r e v e n u e o f U S D 2 4 7 . 7 m i l l i o n f o r t h e f o u r t h q u a r t e r , a d e c r e a s e o f 1 4 . 2 m i l l i o n , s u g g e s t i n g a m o r e p o s i t i v e f i n a n c i a l p o s i t i o n .

D e s p i t e t h e i n c r e a s e i n n e t i n c o m e , i n v e s t o r s r e a c t e d n e g a t i v e l y , a s t h e s t o c k p r i c e m o v e d d o w n o n t h e s a m e d a y . I n v e s t o r s c o u l d c o n s i d e r a d d i t i o n a l r e s e a r c h a n d a n a l y s i s t o d e t e r m i n e i f i n v e s t i n g i n L i t h i a M o t o r s i s a w i s e c h o i c e.