Lithia Motors Inc. (NYSE: LAD) stock surged Wednesday after the auto retailer reported third-quarter 2026 results that beat Wall Street's earnings and revenue estimates.

Lithia Motors Beats Earnings And Revenue Estimates

Lithia reported adjusted earnings of $10.34 per share, beating the analyst consensus estimate of $9.77.

Adjusted earnings rose 8.8% from $9.50 per share a year earlier.

Revenue increased 2.8% year over year to $9.947 billion, topping the $9.728 billion analyst estimate.

Reported earnings surged 54% to $13.22 per share from $8.61 a year earlier. The adjusted figure excludes an unrealized gain on Lithia's investment in Pinewood Technologies Group PLC and other noncore items.

However, adjusted net income declined 5% to $229.3 million from $240.9 million.

Used Car Sales, Financing Drive Growth

Lithia reported stronger profitability in its used-vehicle, aftersales and financing businesses.

Used retail gross profit per vehicle increased $197, or 11%, from a year earlier.

Meanwhile, same-store aftersales gross profit rose 2.4%. The segment's gross margin improved 100 basis points to 59.5%.

Financing Operations income jumped 69% to $32.3 million, supported by record loan originations of $937 million.

Lithia Returns Cash To Shareholders

Lithia repurchased approximately 246,000 shares for $85 million during the quarter at an average price of $345 per share.

The buybacks represented 1.1% of outstanding shares during the quarter. The company has repurchased 8.7% of its shares in 2026.

Lithia still has approximately $535 million available under its share repurchase authorization.

The board also approved a quarterly dividend of 75 cents per share, up 7% from a year earlier. The dividend is payable Nov. 20 to shareholders of record as of Nov. 6.

Lithia ended the quarter with approximately $1.4 billion in liquidity, including cash, marketable securities and available revolving credit.

Lithia Expands Through Acquisitions

Lithia acquired two dealerships and sold two during the third quarter.

In October, the company expanded its presence in Memphis, Tennessee, by acquiring two Hyundai and two Kia dealerships.

The acquisitions are expected to generate approximately $250 million in annualized revenue.

CEO Bryan DeBoer said the company's capital allocation strategy is helping boost earnings per share.

"The capital decisions of the past year are reflected in our financial results, with a meaningfully lower share count magnifying every dollar we earn," DeBoer said.

LAD Stock Price Activity: Lithia Motors shares gained 3.5% to $310 in Wednesday's premarket trading, according to market data.