Penske Beats on Earnings and Revs

Zacks

Penske Automotive Group Inc. (PAG) posted a 21.7% increase in adjusted earnings per share to 73 cents in the third quarter of 2013 from 60 cents in the corresponding quarter last year. The results also exceeded the Zacks Consensus Estimate by 3 cents. Net profits increased 21% to $66 million in the quarter from $54.5 million a year ago.

Revenues improved 14.6% year over year to $3.8 billion, beating the Zacks Consensus Estimate of $3.7 billion. Same-store retail revenues rose 12% to $3.5 billion. The year-over-year rise in revenues was driven by a 13.5% increase in retail sales to 97,027 units, including an 11.9% increase in retail sales to 94,558 units on a same-store basis. Retail sales went up 13.8% in the U.S. and 13% internationally.

New Vehicle revenues went up 15% to $2 billion on a 13.4% rise in sales to 53,509 units. Used Vehicle revenues rose 13.3% to $1.1 billion based on a 13.7% increase in sales to 43,518 units. Revenues in the Service and Parts segment rose 4.4% to $381.5 million.

Revenues in the Fleet and Wholesale Vehicle segment increased 0.5% to $182.6 million, while revenues from Finance and Insurance segment rose 19.3% to $99.8 million. Revenues from Commercial Vehicle and Car Rental amounted to $66 million in the third quarter of 2013.

Gross profit improved 15.6% to $579.9 million from $501.5 billion in the third quarter of 2012. Operating income augmented 25.3% to $109.9 million from $87.7 million a year ago.

Financial Position

Penske had cash and cash equivalents of $71.1 million as of Sep 30, 2013, an increase from $43.4 million as of Dec 31, 2012. Long-term debt was $1.1 million as of Sep 30, 2013, up from $937.5 million as of Dec 31, 2012.

Results at Other Automotive Retailers

AutoNation Inc. (AN), another prominent automotive retailer in the U.S., posted a 13.6% rise in earnings per share to 75 cents in the third quarter of 2013. However, earnings per share missed the Zacks Consensus Estimate by 3 cents.

Group 1 Automotive Inc. (GPI), the largest automotive retailer in the U.S, posted a 9.1% year-on-year decline in adjusted earnings per share to $1.20 in the third quarter of 2013. Reported earnings also missed the Zacks Consensus Estimate by 28 cents.

Penske sells new and previously-owned vehicles along with finance and insurance products. Apart from its franchises in the U.S. and Europe, the company offers repair and maintenance services. Currently, it retains a Zacks Rank #2 (Buy).

Lithia Motors Inc. (LAD), carrying Zacks Rank #2 (Buy), is performing well in the industry where Penske operates.

 

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