Penske Automotive Group is suspending its dividend in a move the nation's second-largest new-vehicle retailer said will save about $34 million in cash during the second quarter.
"The decision to suspend the quarterly dividend is consistent with the other measures the company has implemented to mitigate the impact of COVID-19, including a hiring freeze, the deferral of approximately $150 million in capital expenditures and the furloughing of 57 percent of its worldwide workforce, among others," CEO Roger Penske said in a statement Wednesday.
Under several cost-cutting moves launched in March, Penske and Penske Automotive Group President Robert Kurnick are forgoing salaries for the duration of the coronavirus pandemic, while other executives and managers have taken pay cuts.
In an earnings call last week, Penske said the company expects to trim $75 million to $100 million in expenses annually. The dividend suspension is a cash savings and differs from other expense reductions, a Penske spokesman said.
Penske last paid a cash dividend of 42 cents a share to shareholders on March 3. The company's shares closed at $31.83 a share, down 4.8 percent, on Wednesday.
The company's first-quarter net income was cut nearly in half during the beginning of the coronavirus outbreak.