Penske Automotive PAG delivered an operational update on its business for the second quarter of 2020.
Notably, the company anticipates reporting earnings per share from continuing operations of 52-57 cents for the three months ended Jun 30, 2020. This is on account of its U.S. and U.K. retail automotive dealerships, and its used-vehicle supercenter operations in June in addition to sustained expense management throughout all its business lines.
Per the company’s management, the strong performance in June is due to a strong operational focus to control costs, manage vehicle inventory and maximize gross profit.
Sales of new and used units improved sequentially from May to June in the United States. In the U.K., since the reopening of dealership showrooms, sales of new and used vehicles, vehicle grosses, and service operations have been robust. Notably, sales of new business segment significantly outperformed the overall market in June in the U.K.
Further, sales of used units were strong, with combined operations of the United States and the U.K., generating profit from operations that more than doubled when compared to June of the previous year.
Notably, the company has a strong liquidity position of $1.2 billion of cash and availability under its credit facilities. It is expected to repay $300 million in senior subordinated notes on Aug 15.
Penske announced the suspension of its cash dividends in May 2020. Further, the suspension is anticipated to sustain and revaluated in the future.
The company will release its quarterly results on Jul 29, 2020, before market open.
Zacks Rank & Other Stocks to Consider
The company currently carries a Zacks Rank #1 (Strong Buy). Shares of Penske have depreciated 7.5% year to date compared with the industry’s decline of 4.6%.
Some other top-ranked stocks are Niu Technologies NIU, LCI Industries LCII and Brilliance China Automotive Holdings Ltd. Unsponsored ADR BCAUY, each carrying a Zack Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Niu have surged 115% year to date as against the industry’s decline of 8.3%.
Shares of LCI Industries have depreciated 32.4% year to date compared with the industry’s decline of 4.7%.
Shares of Brilliance have declined 1.7% year to date as against the industry’s decline of 8.3%.
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