Penske Automotive's Q1 net rises 3.5% on acquisitions, UK
Penske Automotive Group Inc.’s first-quarter net income rose 3.5 percent from a year earlier, on acquisitions and strong sales at its UK dealerships, the dealership group said Wednesday.
The nation’s second-largest dealership group said net income rose to $83 million in the quarter as revenue rose 5.3 percent to a first-quarter record $5.08 billion.
Operating income increased 4.2 percent to $150.2 million. Chairman Roger Penske credited the company’s diverse business model for its quarterly gains, which came despite currency headwinds.
“I am pleased to see increases in average gross profit per transaction for new vehicles, used vehicles and finance and insurance when excluding the impact from foreign exchange, coupled with another strong quarter of record results by our UK business,” Penske said in a statement.
Penske’s automotive retail revenue rose 5.4 percent to $4.75 billion. Revenue from its commercial-truck retailing business climbed 2.4 percent to $211.7 million and that from its commercial vehicles Australia/power systems and other operations rose 7.6 percent to $113 million.
Penske’s new-vehicle retail sales -- both in the U.S. and overseas -- rose 5.8 percent to 62,188 units. Used-vehicle sales jumped 18 percent to 62,284. Revenue and gross profit grew in all departments: new, used, finance and insurance, service and parts, and fleet and wholesale.
On a same-store basis, though, new-vehicle retail sales edged up 0.6 percent to 58,725, while used-vehicle sales fell 1.5 percent to 51,852. Gross profit fell in new and used vehicles and fleet and wholesale, while rising by single-digit percentages for finance and insurance and service and parts.
During the quarter, Penske Automotive Group completed acquisitions representing $900 million in estimated annualized revenue, including CarSense in the U.S. and CarShop in the UK, both stand-alone used-only dealerships. It also bought a Jaguar Land Rover store in Paramus, New Jersey, and Schumacher European, a Mercedes-Benz and Sprinter dealership in Phoenix.
UK dealerships accounted for 35.9 percent of Penske Automotive’s first-quarter revenue, up from 35.4 percent a year earlier. The U.S. accounted for 56.5 percent of revenue, down from 57.3 percent, and other international holdings accounted for 7.6 percent, up from 7.3 percent.
Penske ranks No. 2 on Automotive News’ list of the top 150 dealership groups based in the U.S., with new retail sales of 249,695 vehicles in 2016.