Penske Automotive Group Inc.
) witnessed a 31% rise in adjusted earnings per share to 55 cents
in the second quarter of 2012 compared to 42 cents per share in the
corresponding quarter last year. With this, the profit surpassed
the Zacks Consensus Estimate by a penny. In absolute terms, profits
escalated 26.4% to $49.5 million compared with $39.2 million in the
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Revenues increased 19.2% to $3.4 billion in the reported quarter,
surpassing the Zacks Consensus Estimate of 3.3 billion. The rise in
revenues was attributable to a 20.9% increase in retail sales to
84,346 units. New vehicle sales increased 24.8% to 46,766 units
while used vehicle sales improved 16.4% to 37,580 units. Fleet
sales volume rose 86.8 % to 2,836 vehicles and wholesale volume
augmented 24.3 % to 17,796 units.
Revenues from new vehicle sales grew 23.6 % to $1.73 billion and
revenues from used vehicle went up 12.7 % to $964.5 million.
Revenues from parts and service improved 8.6% to $368.8 million.
Meanwhile, the company's finance and insurance business witnessed a
19.8% growth in revenues to $82.7 million.
On a same-store basis, total retail sales improved 12.0% to 77,819
units. Same store revenues went up 9.4% to $2.9 billion in the
Gross profit increased 12.6% to $513.4 million from $455.9 million
in the year-ago quarter. As a percentage of gross profit, selling,
general and administrative expenses declined to 79.8% from 82.1% in
the second quarter of 2011. The company reported a 29.5% increase
in operating income to $90.3 million. This translated into a 20
basis point improvement in operating margin to 2.7% during the
During the last six months ended June 30, Penske repurchased
405,631 shares for $9.8 million with an average price of $24.23. As
a result, the company has approximately $98.3 million worth of
shares remaining for repurchase.
In the second quarter of 2012, the company made redemption of $63.3
million of 3.5% outstanding senior subordinated convertible notes.
The redemption was completed on July 16 and the company did not use
any shares for this purpose.
Penske had cash and cash equivalents of $37.2 million as of June
30, 2012, an improvement from $28.7 million in the corresponding
period of the prior year. Long-term debt amounted to $793.6 million
as of June 30, 2012 compared with $846.8 million as of December 31,
Penske Automotive Group sells new and previously owned vehicles
along with finance and insurance products. It operates 340 retail
automotive franchises, providing 41 different brands and 30
collision repair centers. Apart from its franchises in the U.S. and
Europe, the company offers repair and maintenance services to the
brands it sells.
The company's product mix, including a wide range of imported and
luxury brands, helps it maintain a strong foothold in both the U.S.
and international markets. It competes with
). Currently, the company has a Zacks #3 Rank, which translates
into a Hold rating for the short term (1 to 3 months).