LAD - Lithia Motors stock drives lower despite record revenue EPS

Lithia Motors ( NYSE: LAD ) stock slid on Wednesday despite driving to record second quarter revenue and EPS for the second quarter.

In a volatile premarket trading session, the Oregon-based dealership group surged on initially positive headline numbers before dipping back into the red ahead of the market open.

The initial positive move came after headline numbers exceeded expectations. Overcoming a $0.25 negative foreign currency exchange impact, Lithia Motors ( LAD ) non-GAAP EPS of $12.18 beat analyst consensus by $0.04. Meanwhile, a 20.5% jump in revenue from 2021 to $7.24B edged past estimates by $20M.

"The second quarter results demonstrate the diversity and strength across our business lines as we have delivered the highest quarterly revenues in our history,"  CEO Bryan DeBoer said, homing in on the positive aspects of the print. "These results directly reflect the team's outstanding track record of operational excellence and integrating acquisitions, while building a strong finance portfolio and e-commerce business."

However, margins became compressed in the quarter, with used auto margin falling 340 basis points from the prior year quarter, taking a bite out of the growing sales segment. Overall, average gross profit per unit for used autos fell 10.8% in the quarter. In a reciprocal move, new vehicle margin increased 260 basis points, but unit sales slipped by 8.5%.

Elsewhere, net cash provided by operating activities marked a $263.1M decline as compared to a positive $1.27B in the prior year quarter.

Shares settled at about a 1.88% drop shortly before Wednesday’s market open.

Read more on the details of the quarter .

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