A double-digit percentage jump in used-vehicle sales and higher finance-and-insurance income helped give Lithia Motors Inc., the country's fourth-largest dealership group, a boost in both revenue and adjusted earnings for the fourth quarter of 2018.
But Lithia reported Wednesday that its net income dropped from the year-earlier quarter, which included a large one-time tax benefit because of changes in U.S. tax law.
The Medford, Ore., retailer's fourth-quarter revenue increased 10 percent to a record $2.97 billion. Lithia reported net income of $59.9 million, a 33 percent drop from the fourth quarter of 2017, which included a $33 million tax gain. Stripping away the tax-change effect and other special items such as the sale of stores, Lithia's adjusted fourth-quarter net income rose 12 percent to $60.6 million.
For all of 2018, dealership acquisitions boosted overall revenue by an estimated $1.2 billion. Lithia last year acquired "two large platforms in the Northeast, two smaller complementary acquisitions, added an open point in Texas and separated two locations into standalone stores," the company said in a statement.
Additionally, the retailer shed eight small or underperforming stores in 2018, generating a $15 million gain. More dealership purchases are likely.
"Acquisition activity is heating up," CEO Bryan DeBoer said in the statement. "We anticipate further expansion of our nationwide footprint in 2019 through our proven strategy of targeting high quality assets that are underperforming their potential."
