Penske Automotive's fourth-quarter 2014 earnings improved 14.5% to
$0.79, marginally missing the Zacks Consensus Estimate of $0.80.
Revenues grew 16.3% year over year to $4.41 billion, beating the
Zacks Consensus Estimate of $4.37 billion. The year-over-year rise
was driven by a 10.5% increase in total retail sales to 98,251
units, including a 6.8% rise in same-store retail sales to 94,357
units. Penske Automotive is poised to benefit from increasing
dealerships, rising sales of new vehicles, a strong financial
position and dividend hike. It is also introducing initiatives to
drive new market penetration and improvements in used-vehicle
remarketing. Thus, we are maintaining our Outperform
Penske Automotive Group, Inc., based in Bloomfield Hills, MI,
was established in 1990 and is the second largest automotive
retailer in the U.S. As of Sep 30, 2014, the company operated 177
franchises in the U.S. and 147 franchises outside the U.S.,
primarily in the U.K. Also, the company offers 35 different
Apart from selling new and used vehicles, Penske Automotive
offers higher-margin products, such as finance, insurance and
vehicle service contracts maintenance repair services replacement
parts and aftermarket automotive products. In the first nine months
of 2014, New Vehicle represented 50.5% of the total revenue, Used
Vehicle represented 29.3%, Service and Parts represented 10%, Fleet
and Wholesale Vehicle represented 4.8%, Finance & Insurance
represented 2.6%, and Commercial Vehicle and Car Rental represented
In the first nine months of 2014, Penske Automotive generated
61% of the total automotive dealership revenue in the U.S. and
Puerto Rico, and 39% outside the U.S. Also, 71% of automotive
dealership revenues have been generated from premium brands such as
Audi, BMW, Mercedes-Benz and Porsche.
The company does not have any cost advantage from New Vehicle
sales as it purchases directly from manufacturers and thus,
competes primarily with other franchised dealers in marketing
areas. For Used Vehicle sales, Penske Automotive competes with
other franchised dealers, independent used-vehicle dealers,
automobile rental agencies, online purchasing services, and private
Penske Automotive Group, Inc. (PAG): Read the Full
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