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Penske Automotive (PAG) Lags Q2 Earnings & Revenue Estimates

Zacks Equity Research

Penske Automotive Group, Inc. PAG reported second-quarter 2019 adjusted earnings per share of $1.42 compared with $1.58 recorded in the year-ago quarter. Also, the bottom line missed the Zacks Consensus Estimate of $1.59.

During the reported quarter, income from continuing operations attributable to common shares was $117.7 million compared with $134.6 million in the prior-year quarter.

Penske Automotive, which belongs to the Retail and Whole Sales industry, posted revenues of $5.76 billion for the quarter ended June 2019. The figure declined from the year-ago quarter’s level of $5.94 billion. Further, it missed the Zacks Consensus Estimate of $5.93 billion. The company has not been able to beat the consensus mark for revenues in the last four quarters.

Same-store retail unit sale fell 4.4% year over year to 125,951. Within the retail automotive segment, new-vehicle revenues declined 8.6% year over year to $2.3 billion while used-vehicle revenues fell 2.3% to $1.8 billion.

The company’s gross profit declined to $867.8 million from $889.8 million in the prior-year quarter. During the quarter under review, operating income fell 9% to $171.8 million.

The company operates under three segments — Retail Automotive, Retail Commercial Trucks and Commercial Vehicles Australia/Power Systems and Other.

Revenues in the Retail Automotive fell to $5.2 billion from $5.5 billion in the year-ago quarter.

Revenues in the Retail Commercial Trucks increased to $426.8 million from $338.8 million in the year-ago quarter.

Revenues in the Commercial Vehicles Australia/Power Systems and Other declined to $132.7 million from $146 million in the prior-year quarter.

Penske Automotive Group, Inc. Price, Consensus and EPS Surprise

 

Penske Automotive Group, Inc. Price, Consensus and EPS Surprise

Penske Automotive Group, Inc. price-consensus-eps-surprise-chart | Penske Automotive Group, Inc. Quote

 

Financial Position

Penske Automotive had cash and cash equivalents of $43.8 million as of Jun 30, 2019, up from $39.4 million recorded as of Dec 31, 2018. As of Jun 30, long-term debt was $2.1 million, in line with the figure as of Dec 31, 2018.

Dividend and Share Repurchase

On Jul 17, the company announced that its Board of Directors increased the dividend to its common stock shareholders to 40 cents per share. This marked the 33rd consecutive increase in quarterly dividend.

In second-quarter 2019, the company repurchased 1,706,866 shares for $76.2 million or an average of $43.66 per share. As of Jun 30, it had roughly $74.4 million available under the existing share repurchase authorization.

Zacks Rank & Stocks to Consider

Currently, Penske Automotive has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the auto space worth considering are Copart, Inc CPRT, CarMax, Inc KMX and Gentex Corporation GNTX. While Copart sports a Zacks Rank #1 (Strong Buy), CarMax and Gentex carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Copart has an expected long-term growth rate of 20%. In the past year, shares of the company have rallied 35.6%.

CarMax has an expected long-term growth rate of 12.6%. In the past year, shares of the company have moved up 17.6%.

Gentex has an expected long-term growth rate of 5%. In the past year, shares of the company have returned 17.1%.

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