“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.