Editor's note: Penske Vehicle Services is planning to lay off 165 workers in the Detroit area. An earlier version of this story misstated the name of the Penske affiliate conducting the job cuts.
DETROIT -- Penske Automotive Group Inc.’s fourth-quarter net income rose 16 percent to $82.7 million, on a 0.7 percent drop in revenue, due in part to exchange rates, to $4.89 billion, the dealership group said.
“In the fourth quarter, our retail automotive business continued to perform well, and I was particularly pleased to see increases in new vehicle, used vehicle and finance and insurance gross profit per vehicle retailed when excluding foreign exchange,” said Chairman Roger Penske in a statement.
Income from continuing operations rose 12 percent from the year-earlier period to $82.6 million. That figure includes a $5.1 million income tax benefit from the revaluation of a deferred tax liability on the company’s Premier Truck Group investment.
North America, overseas
Penske Automotive derived 63 percent of its revenue from North America in the fourth quarter, 29 percent from the U.K. and 8 percent from other international markets.
The company does not split out results for its U.S. operations, so all of the following figures reflect Penske’s global performance, and are not adjusted for currency swings.
Retail automotive operations posted revenue of $4.55 billion, or 93 percent of all revenue in the fourth quarter, and gross profit of $663.1 million, or 91 percent of total gross profit. The rest of the company’s revenue and profit came from two operations: retail commercial trucks; and commercial vehicles Australia plus power systems and other.
Total retail new-vehicle automotive sales, excluding its commercial-truck operations, rose 4 percent to 62,786 units, while used retail sales eased 0.8 percent to 49,343.
On a same-store basis, Penske’s fourth-quarter retail sales of new vehicles dropped 0.3 percent to 59,573, while revenue per new vehicle retailed fell 3 percent to $37,604. The average gross profit per new car fell 2.8 percent to $2,966.
In used vehicles, Penske’s same-store retail sales fell 4.3 percent to 47,375, as average revenue per unit slipped 1.7 percent to $26,992 and gross profit per unit rose 4.4 percent to $1,486.
F&I average gross profit per unit dipped to $1,107 from $1,115 in the year-ago quarter.
For all of 2016, net income rose 4.8 percent to $346.4 million, and revenue grew 4.3 percent to $20.12 billion.
New-vehicle retail sales rose 6.9 percent to 249,695, while used retail sales rose 4.6 percent to 207,556.
On a same-store basis, new-vehicle sales rose 1 percent to 229,401, while used-vehicle retail sales softened 0.4 percent to 191,234.
Penske, of suburban Detroit, ranks No. 2 on Automotive News’ list of the top 150 dealership groups based in the U.S., with 233,524 total new retail units sold in 2015.
Separately, effective April 1, affiliate company Penske Vehicle Services will lay off about 165 employees in various Michigan locations due to losing a contract with General Motors for providing certain fleet and transportation services to GM.