Penske reports a 17 rise in Q3 profits, eyes Europe deals
Penske Automotive Group Inc. reported third quarter net earnings increased 17% on greater car sales and powerful revenue from finance and insurance, and support and components businesses.
It finished the quarter with about $800 million in liquidity and Chairman Roger Penske suggested at additional car dealer acquisitions arriving Europe this quarter or in the Q1.
The country's second-biggest car dealer group said nowadays it posted net earnings of $87.5 million during the 3rd quarter, vs. $75.1 million during the same quarter last year. Gross sales rose 13% to $4.96 billion during the quarter.
Penske Automotive stated it was aided by stronger outcomes in every area of the company: new vehicles, used autos, parts and support and F&I, but-its consolidated revenue was hurt by negative currency exchange charges and its gross profits per new and used automobiles fell.
"At present levels, the yr-over-year decrease in rates of exchange starts to subside throughout the fourth-quarter which, along with together with the powerful sales environment in the US and U.K. vehicle marketplaces, and a powerful medium and heavy duty truck industry in the United States of America, we anticipate will continue to push our company forward," Chairman Roger Penske said in a statement.
Third quarter operating revenue increased 14% to $146 million.
Through the quarter, the US accounted for 6-1% of Penske Automotive's gross income, U.K. businesses made up 3 4% and other businesses provided 5 percent.
Penske Automotive had $50-million in money in the conclusion of September and between its US and global credit lines, it's "more than $800 million in liquidity," Roger Penske said in a conference-call with analysts Thursday.
The business has many choices to make use of its cash to additional increase, Roger explained.
"We have got to fulfill [producer] pre-requisites for our capex and company id. We have continued to raise our dividends each quarter and we expect to accomplish this as we move forward," Penske stated. "When Penske look in the marketplaces, from a brand new-vehicle manufacturing company franchise, I believe a few of the pricing is becoming a little stiffer than we have found before. You will find chances and analysts'll continue to grow."
Penske said in the industrial truck marketplace, where Penske Automotive currently has properties, Freightliner is searching for "ongoing consolidation, and analysts see that as an opportunity."
Also, Penske Automotive is pursuing more car dealers in Spain and Italy.
"We are developing an excellent team in Spain and Italy, S O there is chance to develop," Penske stated. "The OEMs are knocking on our door daily. We've got a few [of offers] that are closer-in now and we'll appear at the OEMs in fourthquarter and possibly possess some information in the 1st quarter."
The selling point of of growing in Europe is too little franchise laws that will limit how many brands Penske could possess. Roger Penske said Penske Automotive can purchase car dealers in Europe "at reduced multiples" because marketing sellers usually need to maintain the realty and will rent it at decent rates.
Penske Automotive's re-tail revenue quantity for brand new vehicles increased to 61,041 models offered, up from 57,066, a-7% increase, surpassing the business increase of 6.2%. The business retailed 51,031 employed automobiles compared with 47,363 a year earlier in the day.
Gross revenue per new-vehicle fell to $2,916 vs. $3,005 in the year-ago quarter. On used automobiles, gross revenue dropped to $1,652 from $1,807. F&I gross profits per-vehicle were fairly level at $1,098 compared with $1,096 a year earlier in the day.
On a same-store foundation, Penske offered 59,769 new automobiles in the 3rd quarter compared with 57,066 a year earlier in the day, and 49,495 employed automobiles vs. 47,363. Gross revenue per new-vehicle sold dropped to $2,908 from $3,005 and employed fell to $1,685 from $1,807.
On a same-store basis, retail income rose 5.1% to $4.5 billion.
Penske Automotive stated usedcar gain per unit was affected regionally by stock amounts.
"We were down by around 500 models in the north-east, but gross revenue was up complete nearly $200 per-unit. In the central area we were upwards 700 models and down on net income by $90 as well as in the West we were level on volume and net income" Roger Penske stated.
Next quarter, Penske said, stock management will likely be critical.
"Overall, what we must do is begin early and look within our scheme for stocks on usedcars," Penske stated. "There'll be lots of vehicles coming off-lease -- we need to get our stock balanced correctly."
Penske, of Bloomfield Hills, Mich., ranks No. 2 on the Automotive News list of the top 150 car dealer groups in America, with retail revenue of 216,462 new automobiles in 2014.
It's possible for you to reach Jamie LaReau at [email protected] -- Follow Jamie on
Penske Automotive Group
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