DETROIT -- Penske Automotive Group Inc., which is considering a bid for General Motors Saturn brand, reported today that net income plunged by 50 percent in the first quarter as industry sales rates hit 30-year lows.
Penske reported net income of $16.2 million for the quarter, compared with net income of $31.9 million during the same quarter last year. Revenue plummeted to $2.16 billion, from $3.17 billion during the first quarter of 2008.
The recent quarters results included a one-time accounting gain of $6.5 million after the company bought back $69 million in debt. Without the one-time gain, Penske said income from continuing operations was $9.7 million.
Our ability to reduce costs and inventory levels helped us achieve profitability in the first quarter, Chairman Roger Penske said in a prepared statement. In total, we reduced our inventories by $233 million and improved our days supply of new vehicles to 69 days, from 105 days at the end of 2008.
Penske said it sold 30,688 new vehicles in the quarter, down from 45,188 in the first quarter of last year. Used-vehicle sales rose slightly to 26,811, from 26,402 a year ago.
Penske, the national distributor for the Mercedes-Benz Smart brand, said it wholesaled 5,714 Smart cars during the quarter, up from 4,913 a year ago.
About two-thirds of Penske sales come from premium brands and 30 percent from foreign brands. Only 5 percent of its sale stem from Detroit 3 brands.
Penske, based in suburban Detroit, ranks No. 2 on the Automotive News list of the top 125 U.S. dealership groups with new vehicle sales of 171,872 in 2008.
Roger Penske is considering a bid for Saturn brand, a source familiar with the auto entrepreneur's plans said today. Penske is studying the issue but has made no proposals, said the source, who spoke on condition of anonymity.