Penske Automotive Group PAG reported third-quarter 2024 adjusted earnings of $3.36 per share, which decreased 13.8% year over year and missed the Zacks Consensus Estimate of $3.48. Lower-than-expected results from the Retail Automotive segment contributed to the underperformance. The company registered net sales of $7.59 billion, missing the Zacks Consensus Estimate of $7.77 billion. The top line rose 2% from the year-ago quarter's level.

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Penske’s gross profit in the reported quarter rose 1.9% on a year-over-year basis to $1.24 billion. The operating income contracted 4.3% to $317.4 million. Foreign currency transactions positively impacted revenues, net income and earnings per share (EPS) by $69 million, $1.7 million and 3 cents, respectively.

In the reported quarter, same-store retail units declined 8.5% year over year to 100,015. Within the Retail Automotive segment, same-store new-vehicle revenues were down 1.3% to $2.69 billion. Same-store used-vehicle revenues decreased 11.5% to $1.97 billion.

Penske Automotive Group, Inc. Price, Consensus and EPS Surprise

Penske Automotive Group, Inc. price-consensus-eps-surprise-chart | Penske Automotive Group, Inc. Quote

Segmental Performance

In the reported period, revenues in the Retail Automotive segment came in at $6.34 billion, which remained flat from the year-ago quarter's level. Our estimate was $6.62 billion. Total new and used vehicle deliveries fell 6% year over year to 107,261 units. Gross profit of $1.04 billion rose 1.6% year over year but lagged our estimate of $1.08 billion.

Revenues in the Retail Commercial Truck segment increased 10.2% to $1.06 billion and outpaced our estimate of $975.4 million. Gross profit in the segment was $157.1 million, up from $155.4 million reported in the year-earlier quarter. Our expectation was $162 million.

The Commercial Vehicle Distribution and Other segment’s revenues in the reported quarter increased 18.4% to $186.8 million and surpassed our estimate of $169.3 million. Gross profit came in at $44.6 million, which increased from $39.7 million reported in the year-ago period and beat our estimate of $43.7 million.

Financial Tidbits

In the quarter under review, SG&A costs totaled $885.2 million, up 3.7% year over year. As of Sept. 30, 2024, Penske had cash and cash equivalents of $91.9 million, down from $96.4 million as of Dec. 31, 2023. The long-term debt amounted to $1.13 billion, down from $1.42 billion as of Dec. 31, 2023.

During the quarter under discussion, PAG repurchased 0.4 million shares of common stock for $58.1 million. As of Sept. 30, 2024, $157.4 million of stock repurchase authorization remained outstanding.

Penske increased dividend by 11% to $1.19 per share, to be paid out on Dec. 3, 2024, to shareholders of record as of Nov. 15, 2024. This marked the 16th consecutive quarterly increase in the payout.