Penske Automotive Q2 net income falls 20% on higher interest costs

Penske Automotive Group Inc.'s net income dropped 20 percent in the second quarter. Higher interest expense and decreased equity income from Penske Transportation Systems were the main reasons for the decline, the company said.

Floorplan interest was up 51 percent. Income from Penske Transportation Solutions fell to $52.9 million compared with $73.3 million earned in the same quarter last year.

Net income: $242.9 million, down from $302.6 million earned the same three months last year

Net income attributable to common stockholders: $241.2 million, down from $300.8 million earned the same time last year

Revenue: $7.7 billion, up 3.1 percent from a year earlier

Vehicle sales: New-vehicle retail sales rose 2.6 percent to 50,861, while used-vehicle retail sales edged up 0.3 percent to 65,571. Combined new-vehicle, used-vehicle and United Kingdom agency sales totaled 126,653 vehicles, up 2.2 percent from a year earlier. Penske didn't specify U.S. sales.

"I am pleased to see our service and parts business remains strong and contributed to our record total quarterly revenue of $7.7 billion," Penske Automotive CEO Roger Penske said in a statement.

Penske Automotive's franchised dealerships in the U.S. and U.K. do not use CDK Global's dealer management system and were not impacted by the tech provider's cyberattacks and related outage in June and early July.

Penske Automotive's Premier Truck Group does use CDK's system, but any effect on that business in the second quarter was "immaterial," a spokesperson said.

In June, Penske Automotive said it finalized its purchase of two Porsche dealerships near Melbourne, Australia. They are the group's first retail automotive dealerships in Australia. Penske Automotive expects the stores to add $130 million in annual revenue.

Shares of Penske Automotive on July 31 closed up 5.6 percent to $174.11 per share.

Penske Automotive, of Bloomfield Hills, Mich., ranks No. 3 on Automotive News' list of the top 150 dealership groups based in the U.S., retailing 229,942 new vehicles in 2003.