Lithia Motors swings to 3Q profit

Automotive retailer Lithia Motors Inc. posted a $5.7 million third-quarter profit, citing lower costs and a boost from the government's Cash for Clunkers program.

But investors weren't impressed and Lithia shares dropped $1.44, or 14.5 percent, to $8.49 in Friday afternoon.

Medford, Ore.-based Lithia said late Thursday its profit amounted to 26 cents per share and compared with a loss of $2.4 million, or 12 cents per share, in the same quarter last year.

Excluding one-time items and discontinued operations, the company posted an adjusted profit from continuing operations of 33 cents per share compared with an adjusted 7 cents per share in the prior-year period.

Revenue dropped 9.6 percent to $458.2 million from $506.9 million, as new vehicle sales dropped 15 percent to $241.6 million, while used vehicle sales fell less than a percent to $136.2 million.

New vehicle sales at stores open at least a year fell 14.3 percent, while used vehicle retail sales increased 3.9 percent. Service, body and parts sales at stores open at least a year fell 2.8 percent.

The company said its revenue was boosted by sales stemming from the government's Cash for Clunkers program. In addition, Lithia said its overall results benefited from lower costs and a drop in selling , general and administrative expenses.