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Market Overview

Earnings Preview for Lithia Motors

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On Wednesday, February 03, Lithia Motors (NYSE:LAD) will report its last quarter's earnings. Here is Benzinga's preview of the company's release.

Net Income, Earnings, And Earnings Per Share

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Lithia Motors earnings will be near $5.07 per share on sales of $3.92 billion, according to analysts. In the same quarter last year, Lithia Motors posted EPS of $2.95 on sales of $3.27 billion.

Why Analyst Estimates And Earnings Surprises Are Important

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

The Wall Street consensus estimate for earnings would represent a 71.86% increase for the company. Revenue would be up 19.91% from the same quarter last year. Here is how the Lithia Motors's reported EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020
EPS Estimate 5.86 1.54 2.05 2.97
EPS Actual 6.89 3.72 2.01 2.95
Revenue Estimate 3.57 B 2.42 B 2.93 B 3.20 B
Revenue Actual 3.62 B 2.76 B 2.80 B 3.27 B

Stock Performance

For a full 12 months, the return has risen by 139.5%. Given that these returns are generally positive, long-term shareholders are probably relaxed going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.

Do not be surprised to see the stock move on comments made during its conference call. Lithia Motors is scheduled to hold the call at 10:00:00 ET and can be accessed here.

 

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Posted-In: BZI-EPEarnings