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Penske Beats, EPS Rise 21% - Analyst Blog
Penske Automotive Group Inc.
) posted a 21.3% increase in profits to 57 cents in the fourth
quarter of 2012 from 47 cents per share in the same quarter of
2011. EPS exceeded the Zacks Consensus Estimate by 4 cents. Net
profits increased 19.5% to $51.0 million in the quarter from
$42.7 million a year ago.
Revenue escalated 17.9% to $3.4 billion, including an 11.4% rise in same-store retail revenues in the quarter. It was marginally higher than the Zacks Consensus Estimate of $3.3 billion.
The improvement was driven by a 19.3% increase in total retail unit sales, including an 11.5% increase on a same-store basis. Gross profit improved 16.9% to $515.1 million while operating profit increased 19.9% to $91.5 million.
New Vehicle revenues went up 21.3% to $1.8 billion on a 21.7% rise in sales to 46,392 units. Used Vehicle revenues went up 13.2% to $902.5 million based on a 16.2% increase in sales to 34,991 units. Revenues in the Service and Parts segment rose 9.2% to $363.5 million.
Meanwhile, revenues in the Fleet and Wholesale Vehicle segment increased 27.2% to $221.2 million and in the Finance and Insurance segment rose 19.3% to $80.2 million.
For full year 2012, adjusted EPS rose 26.7% to $2.28 from $1.80 a year ago. Total revenue went up 18.3% to $13.2 billion while same-store retail revenues rose 9.9% to $11.2 billion during the year. Total retail units increased 20.6% to 326,344 vehicles while same-store retail units scaled up 12.3% to 294,888 vehicles.
Penske benefited from its expanded global presence by completing acquisitions in Northern Ireland and Italy, as well as domestically by entering the Madison, WI market in the U.S. In total, the acquisitions contributed $750 million in estimated annualized revenue during the year.
Penske had cash and cash equivalents of $43.8 million as of Dec 31, 2012, an improvement from $27.2 million as of Dec 31, 2011. Long-term debt amounted to $937.5 million as of Dec 31, 2012, up from $850.2 million as of Dec 31, 2011. However, long-term debt to capitalization ratio decreased to 41.6% from 42.5% a year ago.
Penske Automotive Group sells new and previously owned vehicles along with finance and insurance products. It operates 344 retail automotive franchises, offering 40 different brands and 30 collision repair centers. Apart from its franchises in the U.S. and Europe, the company offers repair and maintenance services.
The company currently has a Zacks Rank #2 on its stock, which translates to a Buy rating for the short term (1 to 3 months). Other stocks that are currently performing well in the same industry include Asbury Automotive Group, Inc. ( ABG ) and Rush Enterprises, Inc. ( RUSHA ) with Zacks Rank #1 (Strong Buy) and Group 1 Automotive ( GPI ) with Zacks Rank #2 (Buy).
ASBURY AUTO GRP (ABG): Free Stock Analysis Report
GROUP 1 AUTO (GPI): Free Stock Analysis Report
PENSKE AUTO GRP (PAG): Free Stock Analysis Report
RUSH ENTRPRS-A (RUSHA): Free Stock Analysis Report
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