Penske Automotive’s Q3 net up 7.9% on acquisitions

DETROIT — Penske Automotive Group Inc.’s third-quarter net income rose 7.9 percent, to $94.4 million, partially attributable to recent acquisitions. Revenue jumped 7.2 percent to $5.52 billion.

“Third-quarter results were driven by recently completed acquisitions, improving variable gross profit per unit retailed” and higher margins in the company’s service and parts operations, plus “strong performance from our North American retail commercial truck operations and our equity investment in Penske Truck Leasing,” said Chairman Roger Penske in a statement.

The company said storm-related losses, expenses and business interruptions trimmed income from continuing operations by about $3 million.

North America accounted for 58.9 percent of Penske’s revenue mix, down from 60.7 percent a year earlier, while the U.K.’s share was 33.8 percent, up from 32.7 percent. The company’s international holdings accounted for 7.3 percent of revenue, up from 6.6 percent.

In its retail automotive operations, Penske sold more used vehicles than new, reflecting recent acquisitions of used-only dealership groups. Penske’s total new-vehicle retail sales fell 2.5 percent to 64,365 units; the overall U.S. new-vehicle retail market declined 1 percent in the same period. Penske’s used-vehicle sales rose 25 percent to 65,892.

Both revenue and gross profit rose in all operations: new, used, finance and insurance, service and parts and fleet and wholesale.

Per-vehicle gross profit in finance and insurance rose to $1,167 from $1,088. Revenue per vehicle retailed for new vehicles rose 3.8 percent to $38,542, but fell 7.6 percent for used vehicles to $25,337.

Penske ranks No. 2 on Automotive News’ list of the top 150 dealership groups based in the U.S., with retail sales of 249,695 new vehicles in 2016.a