Penske's Q3 net income slips despite record revenue

Penske Automotive Group Inc.'s third-quarter net income slipped despite record revenue, as the retail giant was dinged by foreign currency exchange, lower used-vehicle revenue and declining used-vehicle sales.

Penske reported Wednesday that net income dropped 4.2 percent to $341.5 million. Revenue increased 6.5 percent to $6.9 billion. The company noted foreign currency exchange negatively impacted revenue by $349.4 million in the quarter, while it dropped net income by $11 million.

Penske said the average gross profit per new vehicle rose 12 percent to $6,678. The average gross profit per used vehicle, however, fell 27 percent to $2,004. Finance and insurance and service and parts revenues both increased in the quarter.

Revenue for Penske's stand alone used-vehicle CarShop division decreased 7 percent to $406.4 million on sales of 17,567 vehicles, down 5 percent.

While most of Penske's revenue comes from automotive retail, the company also reported that pretax earnings from its commercial truck dealerships increased 9.3 percent and income from its ownership stake in Penske Transportation Solutions rose 15 percent. Pretax earnings for its Australian unit decreased 2 percent.

"Our performance continues to demonstrate the benefits of the company's diversification," Penske Automotive CEO Roger Penske said in a statement. "Demand for new vehicles remains strong in both automotive and truck retail operations."

Penske said its deal to buy five Mercedes-Benz dealerships and three aftersales locations in London from Mercedes-Benz Retail Group was completed.

Shares of Penske Automotive closed up 3 percent to $103.81 on Tuesday.

Q3 revenue: $6.9 billion, up 6.5 percent from a year earlier

Q3 net income: $341.5 million, down 4.2 percent

Q3 vehicle sales: 109,969 combined new- and used-vehicle sales, down 4.2 percent. On a same-store basis, Penske sold 103,937 new and used vehicles, down 9.2 percent. Penske didn't specify its U.S. sales.

Records: Third-quarter revenue

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.