We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Penske Automotive (PAG) Beats on Q2 Earnings & Revenues
Read MoreHide Full Article
Share price of Penske Automotive Group, Inc. (PAG - Free Report) increased 6.7% to $39.62 on Jul 29 after the company reported better-than-expected second-quarter 2016 earnings. Penske Automotive’s earnings per share improved 6.7% to $1.11 from $1.04 recorded a year ago. Moreover, earnings per share surpassed the Zacks Consensus Estimate of $1.08.
Net income dropped 0.5% to $93.5 million in the reported quarter from $94 million a year ago. Income from continuing operations improved 0.6% to $94.7 million from $94.1 million in the year-ago quarter.
Revenues grew 6.8% year over year to $5.3 billion, surpassing the Zacks Consensus Estimate of $5.1 billion. Excluding foreign exchange, total revenue increased 9.2%, driven by a 6.2% rise in total retail automotive sales to 115,106 units.
Same-store retail revenues rose 0.2%. Same-store retail automotive revenues improved 0.7% to $4.59 billion.
Gross profit went up 5.5% to $771.3 million from $731.3 million in the second quarter of 2015. Operating income augmented 3.3% to $164.1 million from $158.9 million a year ago.
The company operates under three reportable segments – Retail Automotive, Retail Commercial Trucks, and Commercial Vehicles Australia/Power Systems and Other.
Revenues from Retail Automotive rose 6.2% to $4.8 billion in the reported quarter.
Revenues from Retail Commercial Trucks increased 27.9% to $309.5 million from $241.9 million recorded in the year-ago quarter.
Revenues from Commercial Vehicles Australia/Power Systems and Other decreased 12.9% to $107.8 million in the reported quarter.
Financial Position
Penske Automotive had cash and cash equivalents of $97.5 million as of Jun 30, 2016, up from $62.4 million as of Dec 31, 2015. Long-term debt was $1.66 billion as of Jun 30, 2016, up from $1.28 billion as of Dec 31, 2015.
Acquisition Update
On Jul 27, 2016, Penske Automotive acquired an additional 14.4% interest in Penske Truck Leasing Co., L.P. (“PTL”), from subsidiaries of GE Capital Global Holdings, LLC, for $498.7 million. The acquisition was supported by the company's existing liquidity including the U.S. credit agreement. After the acquisition, Penske Automotive holds a 23.4% ownership interest in PTL. The company expects that this acquisition will help boost earnings per share by 25 cents annually and will lead to additional cash flow. The acquisition will also lead to significant cash tax savings.
In Apr 2016, Penske Automotive’s subsidiary, Premier Truck Group acquired Harper Truck Centres, a Freightliner, Western Star, Thomas Built Bus and Fuso commercial truck dealership that operates in Ontario, Canada. The company expects that this acquisition will add annual revenues of $130 million and complement its partnership with Freightliner and Western Star brands. This acquisition should provide huge market potential to Penske Automotive and lead to business opportunities in the future.
Zacks Rank
Currently, Penske Automotive carries a Zacks Rank #3 (Hold).
Some better-ranked automobile stocks include The Goodyear Tire & Rubber Company (GT - Free Report) , Johnson Controls Inc. (JCI - Free Report) and Gentex Corp. (GNTX - Free Report) , each carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Penske Automotive (PAG) Beats on Q2 Earnings & Revenues
Share price of Penske Automotive Group, Inc. (PAG - Free Report) increased 6.7% to $39.62 on Jul 29 after the company reported better-than-expected second-quarter 2016 earnings. Penske Automotive’s earnings per share improved 6.7% to $1.11 from $1.04 recorded a year ago. Moreover, earnings per share surpassed the Zacks Consensus Estimate of $1.08.
Net income dropped 0.5% to $93.5 million in the reported quarter from $94 million a year ago. Income from continuing operations improved 0.6% to $94.7 million from $94.1 million in the year-ago quarter.
Revenues grew 6.8% year over year to $5.3 billion, surpassing the Zacks Consensus Estimate of $5.1 billion. Excluding foreign exchange, total revenue increased 9.2%, driven by a 6.2% rise in total retail automotive sales to 115,106 units.
Same-store retail revenues rose 0.2%. Same-store retail automotive revenues improved 0.7% to $4.59 billion.
Gross profit went up 5.5% to $771.3 million from $731.3 million in the second quarter of 2015. Operating income augmented 3.3% to $164.1 million from $158.9 million a year ago.
PENSKE AUTO GRP Price, Consensus and EPS Surprise
PENSKE AUTO GRP Price, Consensus and EPS Surprise | PENSKE AUTO GRP Quote
Segment Performance
The company operates under three reportable segments – Retail Automotive, Retail Commercial Trucks, and Commercial Vehicles Australia/Power Systems and Other.
Revenues from Retail Automotive rose 6.2% to $4.8 billion in the reported quarter.
Revenues from Retail Commercial Trucks increased 27.9% to $309.5 million from $241.9 million recorded in the year-ago quarter.
Revenues from Commercial Vehicles Australia/Power Systems and Other decreased 12.9% to $107.8 million in the reported quarter.
Financial Position
Penske Automotive had cash and cash equivalents of $97.5 million as of Jun 30, 2016, up from $62.4 million as of Dec 31, 2015. Long-term debt was $1.66 billion as of Jun 30, 2016, up from $1.28 billion as of Dec 31, 2015.
Acquisition Update
On Jul 27, 2016, Penske Automotive acquired an additional 14.4% interest in Penske Truck Leasing Co., L.P. (“PTL”), from subsidiaries of GE Capital Global Holdings, LLC, for $498.7 million. The acquisition was supported by the company's existing liquidity including the U.S. credit agreement. After the acquisition, Penske Automotive holds a 23.4% ownership interest in PTL. The company expects that this acquisition will help boost earnings per share by 25 cents annually and will lead to additional cash flow. The acquisition will also lead to significant cash tax savings.
In Apr 2016, Penske Automotive’s subsidiary, Premier Truck Group acquired Harper Truck Centres, a Freightliner, Western Star, Thomas Built Bus and Fuso commercial truck dealership that operates in Ontario, Canada. The company expects that this acquisition will add annual revenues of $130 million and complement its partnership with Freightliner and Western Star brands. This acquisition should provide huge market potential to Penske Automotive and lead to business opportunities in the future.
Zacks Rank
Currently, Penske Automotive carries a Zacks Rank #3 (Hold).
Some better-ranked automobile stocks include The Goodyear Tire & Rubber Company (GT - Free Report) , Johnson Controls Inc. (JCI - Free Report) and Gentex Corp. (GNTX - Free Report) , each carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>