Lithia & Driveway (NYSE:LAD) reported first-quarter results on Wednesday that came in ahead of Wall Street expectations, though its shares showed little reaction as investors focused on margin dynamics.
The stock was broadly flat, slipping 0.01% in after-hours trading following the release.
The company posted adjusted earnings per share of $7.34, exceeding the analyst consensus of $6.88 by $0.46.
Revenue reached $9.27 billion, up 1% year over year from $9.18 billion and slightly ahead of estimates of $9.24 billion. However, adjusted net income fell 18% to $173.3 million, compared with $210.9 million in the same period last year.
Lithia highlighted solid performance in its aftersales and finance segments.
Aftersales revenue increased 3.8% on a same-store basis, while gross profit rose 5.7% and gross margin expanded by 100 basis points to 58.7%.
Driveway Finance Corporation delivered record loan originations of $840 million, with penetration reaching 18%. Gross profit per unit in used vehicle retail rose 9%, or $133, sequentially to $1,688.
“Our team drove strong results across our platform and sequential growth in earnings, delivering higher revenues and improved GPU in used vehicles, meaningful growth in aftersales, and growing penetration in Driveway Finance,” said Bryan DeBoer.
During the quarter, the company repurchased $259 million worth of shares, equivalent to about 4% of its outstanding stock.
Lithia ended the period with roughly $1.4 billion in cash, marketable securities, and available credit. The board approved a dividend of $0.57 per share, payable on May 22 to shareholders of record as of May 8.
Acquisitions completed in the first quarter are expected to contribute approximately $425 million in annualized revenue.