Lithia Motors (LAD) reported the acquisition of Connell Chevrolet located in Killeen, Texas. The store, which will be named of All American Chevrolet of Killeen, will contribute $60 million to the company’s total revenues.
The acquisition will lead to the expansion of Lithia Motors in Texas. The company will also enjoy the benefits associated with the dominant position of Connell in Killeen. Further, there will be an addition of 55 members to the company’s total number of employees.
Lithia Motors, in May 2012, acquired Bellingham, Washington-based Jerry Chambers Chevrolet Cadillac. The store, which was named Chambers Chevrolet Cadillac of Bellingham, is expected to increase the company’s revenues by $40 million.
Lithia Motors, in second-quarter 2012, witnessed a 41% surge in its earnings per share to 76 cents from 54 cents in the comparable quarter of 2011 (excluding all special items). The results surpassed the Zacks Consensus Estimate by 12 cents. Profits escalated 38% to $19.9 million from $14.4 million in the year-ago quarter.
Revenues went up 26% to $847.1 million, beating the Zacks Consensus Estimate of $773 million. The growth was driven by strong retail new vehicle sales and higher revenues from finance and insurance business.
Lithia Motors is the ninth largest automotive retailer in U.S. With 86 stores in 11 states, the company provides 28 new vehicle brands along with all brands of used vehicle. It competes with AutoNation Inc. (AN) and Penske Automotive Group Inc. (PAG)
The company’s recent acquisitions including Chevrolet Cadillac store in Bellingham, Wash., GMC and Buick franchises in Fairbanks, Alaska, and new Dodge and Ram franchises in Las Cruces, N.M. are expected to aid to earnings growth in the future. Currently, Lithia retains a Zacks #1 Rank, which translates into a short-term (1 to 3 months) Strong Buy rating.
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