Penske Automotive Group 2024 Q1 Earnings Drop

Ken Zino of AutoInformed.com on Penske Automotive Group 2024 Q1 Earnings Drop

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Penske Automotive Group (NYSE: PAG)* said that during Q1 2024 revenue increased 1.5% to $7.4 billion. Net income attributable to common stockholders was $215.2 million compared to $298.3 million in the prior year period, and related earnings per share was $3.21 compared to $4.31 for the same period in 2023. Foreign currency exchange positively impacted revenue by $98.1million, net income attributable to common stockholders by $1.4 million, and earnings per share by $0.02.

“Our retail automotive service and parts revenue grew 9% to a quarterly record of $746 million. During the quarter, we experienced a recovery across our used vehicle retail automotive operations with profitability improving sequentially by $428 per unit retailed. Further, I was pleased with our focus on controlling costs as selling, general, and administrative expenses as a percentage of gross profit improved by 30 basis points sequentially to 70.7%,” said Roger Penske Chair and CEO.

“The Company’s financial results for the first quarter of 2024 were driven by a resilient performance in the retail automotive and retail commercial truck segments,” PAG said in the earnings release. “Income before income taxes, net income, and income per share, however, were negatively impacted by higher interest costs of $17.4 million, driven primarily by an increase in interest rates and higher inventory levels which increased borrowings under our floorplan arrangements combined with lower equity earnings from the Company’s investment in Penske Transportation Solutions (“PTS”).”

“Lower equity earnings from PTS were primarily due to lower commercial rental utilization, lower consumer rental revenue, higher interest rates and average debt balances, and lower gains from the sale of revenue earning vehicles partially offset by improved operating results in full-service leasing and distribution center management when compared to the same period in 2023,” PAG said.

First Quarter 2024 Compared to Q1 2023

  • New and Used Retail Automotive Units Delivered – increased 4%• New Vehicle +6%; Used Vehicle +2%
  • Retail Automotive Same-Store Revenue – decreased 1%• New Vehicle -1%; Used Vehicle -1%; Finance & Insurance -2%; Service & Parts +5%• Retail Automotive Same-Store Gross Profit – decreased 4%
  • New Vehicle -17%; Used Vehicle flat; Finance & Insurance -2%; Service & Parts +5%• Retail Commercial Truck Same-Store Revenue – decreased 15%
  • New Vehicle -21%; Used Vehicle +23%; Finance & Insurance flat; Service & Parts -6%• Retail Commercial Truck Same-Store Gross Profit – decreased 6%• New Vehicle flat; Used Vehicle -26%; Finance & Insurance flat; Service & Parts -5%

*Penske Automotive Group (NYSE: PAG) headquartered in Bloomfield Hills, Michigan, is a diversified international transportation services company and one of the world’s premier automotive and commercial truck retailers. PAG operates dealerships in the United States, the United Kingdom, Canada, Germany, Italy, and Japan and is one of the largest retailers of commercial trucks in North America for Freightliner. PAG also distributes and retails commercial vehicles, diesel and gas engines, power systems, and related parts and services principally in Australia and New Zealand. PAG employs over 28,500 people worldwide. Additionally, PAG owns 28.9% of Penske Transportation Solutions (“PTS”), a business that employs over44,000 people worldwide, manages one of the largest, most comprehensive and modern trucking fleets in North America with more than 442,000 trucks, tractors, and trailers under lease, rental, and/or maintenance contracts and provides innovative transportation, supply chain, and technology solutions to its customers. PAG is a member of the S&P Mid Cap 400, Fortune500, Russell 1000, Russell 3000 indexes, and the S&P Mid Cap 400 Index.

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One Response to Penske Automotive Group 2024 Q1 Earnings Drop

  1. “Based on the strength of our balance sheet and continued strong cash flow, we are pleased to provide our shareholders with a 10% increase in the cash dividend,” said Penske Automotive Group President, Robert Kurnick, Jr. on 9 May 2024. The dividend is payable 4 June 2024, to shareholders of record as of 20 May 2024.

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