Lithia Motors Inc's quarterly earnings on Wednesday easily outperformed Wall Street projections, aided by low vehicle supplies that have pushed automobile prices to new highs.

Premarket, the company's stock climbed 5.7% to $358.00.

Due to a global semiconductor shortage, dealers and automakers have been obliged to operate with far fewer stocks than usual, forcing purchasers to pay record prices for their preferred automobiles.

According to auto analyst J.D. power, the average retail price for new automobiles set record highs every month throughout the quarter, bolstering profitability at auto dealers as demand for personal transportation remained strong.Lithia Motors is taking on AutoNation to become top dealer in U.S.

Lithia, the first major car retailer in the United States to publish third-quarter results, reported its earnings nearly doubled, with gross profit per new vehicle jumping 78.7% to $5,221.

"Profit margins per vehicle may get even greater in the near term," Guggenheim Securities analyst Ali Faghri said, "since consumer demand for vehicles is very robust right now amid constrained supply."

The average gross profit for used vehicles at the Oregon-based company, on the other hand, increased 3.9% to $3,046.

According to Refinitiv IBES, Lithia's quarterly revenue increased by approximately 70% to $6.17 billion, exceeding analyst projections of $5.8 billion.

For the quarter ended Sept. 30, net income increased by 94% to $307.9 million, or $10.11 per share.

Excluding adjustments, the business earned $11.21 per share, exceeding the $9.28 per share consensus.