Penske Automotive Group earnings soar on higher sales

BLOOMFIELD HILLS (AP) -- Penske Automotive Group, Inc. reported sharply higher earnings as the dealership group sold more cars at higher prices throughout the quarter. Penske announced Wednesday that its net income rose to 61 cents per share from 33 cents per share a year earlier, a jump of 85 percent. Revenue rose 11 percent to $2.95 billion from $2.67 billion. The results included an income tax benefit of 12 cents per share. Excluding that benefit and a loss of 1 cent per share from discontinued operations, the company earned 50 cents per share, an increase of 31 percent compared with adjusted earnings from last year's third quarter. Analysts expected the company to earn 42 cents per share, after removing the effects of special items, on revenue of $3.04 billion. Separately, the company announced Wednesday it will raise its dividend to 9 cents per share, an increase of 12.5 percent. The dividend is payable Dec. 1 to shareholders of record on Nov. 10. Penske owns 170 auto dealer franchises in 17 U.S. states and Puerto Rico and 155 dealer franchises abroad, mostly in the United Kingdom. The company sold 72,204 cars in the quarter, up from 67,994 in the same quarter last year. The company's sales of new cars slipped slightly, but the prices for those cars rose 8 percent, to $36,236 per car. Gross profit per new car rose 15 percent, to $3,238. In a statement, Penske Automotive Group Chairman Roger Penske said the company's new car sales where held back because Japanese automakers are still not able to return to normal production after the March earthquake and tsunami in Japan. That left Penske with fewer new vehicles to sell. He expects the automakers' production to fully recover by the first quarter of next year. Used car volumes rose 16 percent. Used car prices rose 2 percent to $26,404 per car. Gross profit per used car rose 3 percent to $1,978. Revenue at dealerships open at least a year rose 6.4 percent. This measure is considered a key gauge of a retailer's performance because it excludes results from stores that open or close during the year. Published: Thu, Nov 3, 2011