Penske Automotive Group Inc.'s second-quarter net income jumped as the company recorded its most profitable quarter ever, even amid a slight drop in revenue and lower new- and used-vehicle sales.
Second-quarter net income rose 10 percent from a year earlier to $375.9 million. Revenue, which Penske said was hurt by foreign currency exchange, slipped 1.2 percent to $6.91 billion.
Penske was aided by higher new-vehicle gross profit per vehicle and gains in finance and insurance profit per vehicle, plus higher overall used-vehicle and service and parts revenue.
While most of Penske's revenue comes from automotive retail, the company also reported that pretax earnings from its commercial truck dealerships surged 32 percent, pretax earnings for its Australian unit increased 5 percent, and income from its ownership stake in Penske Transportation Solutions rose 33 percent.
"Despite the supply constraints that continue to impact inventory availability, demand remains strong and we continue to benefit from the diversification of our operations," CEO Roger Penske said in a statement Wednesday.
Revenue for Penske's standalone used-vehicle CarShop division increased 15 percent to $468 million on sales of 20,124 vehicles, up 7 percent. But Penske said the unit lost $1.5 million pretax because of higher acquisition and reconditioning costs.
Penske operated 21 CarShop outlets in the quarter, after it in May closed two small CarShop express locations in the U.K.
In April, Penske acquired a BMW-Mini dealership and a collision center in Southern California and announced it had purchased three BMW-Mini stores and a collision center in the U.K. Penske also announced it plans in the third quarter to buy five Mercedes-Benz dealerships and three aftersales locations in London from Mercedes-Benz Retail Group. Those sites are expected to generate about $550 million in revenue this year.
Shares of Penske Automotive closed down 1.7 percent to $108.35 on Tuesday.
Second-quarter revenue: $6.91 billion, down 1.2 percent from a year earlier
Second-quarter net income: $375.9 million, up 10 percent from a year earlier
Second-quarter vehicle sales: 115,509 combined new- and used-vehicle sales, down 13 percent. On a same-store basis, Penske sold 109,459 new and used vehicles, down 17 percent. Penske didn't specify U.S. vehicle counts but said its same-store new-vehicle sales slid 30 percent in the U.S. and dropped 14 percent in the U.K., and overall were down 26 percent. Same-store used-vehicle sales fell 11 percent in the quarter and were down 15 percent in the U.S. and down 5 percent in the U.K.
Records: Income from continuing operations before taxes; net income; and earnings per share of any quarter
Ranking: Penske, of Bloomfield Hills, Mich., ranks No. 3 on Automotive News' list of the top 150 dealership groups based in the U.S., retailing 195,384 new vehicles in 2021.
