Penske Automotive Q3 net rises 1.1% to $88.5 million
Penske Automotive Group Inc.’s third-quarter net income rose 1.1 percent as gains in gross profit margins in the U.S. for new and used vehicles were offset by foreign exchange-related losses and lower global profit margins for vehicle sales. The company’s cost of sales also rose faster than revenue.
The nation’s second-largest dealership group said today it posted net income of $88.5 million. Revenue increased 3.9 percent to $5.15 billion.
Foreign exchange rates hurt Penske Automotive’s results. Excluding the foreign exchange, its total revenue increased 9.7 percent. It also saw same-store retail revenue decline 2 percent, but excluding foreign exchange, that revenue increased 4.1 percent. But the company saw higher gross profits per unit sold in the U.S.
No Brexit impact
“Our business continued to perform well in the third quarter, producing another quarter of record results despite the translation effects from foreign currency headwinds,” Chairman Roger Penske said in a statement. “I was particularly pleased to see new and used gross profit per unit increase in the U.S. by $52 and $179, respectively.”
Penske said the Brexit vote in the U.K. did not impact results at the company’s dealerships there and that business “remained strong, generating a 6.9 percent increase in their same-store unit volume.”
Third-quarter operating income declined 3.1 percent to $141.5 million.
During the quarter, North America accounted for 60 percent of Penske Automotive’s revenue, U.K. operations made up 33 percent, and other operations contributed 7 percent.
By segment, retail automotive operations accounted for 91 percent of gross profit, retail commercial trucks 5.1 percent, and commercial vehicles Australia plus power systems and other made up 4.2 percent.
Sales up, gross down
Penske Automotive’s global retail new light-vehicle sales rose 8.1 percent to 65,986 units. Retail used-vehicle sales rose 2.9 percent to 52,536.
Gross profit per new vehicle retailed declined to $2,691 from $2,916 in the year-earlier quarter. On used vehicles, gross profit fell to $1,592 from $1,652. F&I gross profit per vehicle retailed declined to $1,088 from $1,098. Those figures are for operations in the U.S. and overseas.
On a same-store basis, Penske sold 60,140 new cars in the quarter, up 0.4 percent, and 48,970 used vehicles, down 1.1 percent. Gross profit per new vehicle retailed dropped to $2,684 from $2,921 and on used vehicles fell to $1,634 from $1,688.
On a same-store basis, automotive retail revenue eased 1.6 percent to $4.46 billion.
Penske, of Bloomfield Hills, Mich., ranks No. 2 on Automotive News’ list of the top 150 dealership groups in the U.S., with retail sales of 233,524 new vehicles in 2015.
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