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Penske (PAG) Q1 Earnings and Revenues Top Estimates

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Penske Automotive Group (PAG - Free Report) reported impressive first-quarter 2022 adjusted earnings of $4.76 per share, increasing a whopping 110.6% year over year and surpassing the Zacks Consensus Estimate of $3.94. Higher-than-expected gross profit in the Retail Automotive and Retail Commercial Truck segments resulted in this outperformance.

The auto retailer registered net sales of $6,975.4 million, outpacing the Zacks Consensus Estimate of $6,257.2 million. The top line also rose 20.8% from the year-ago quarter.

Penske Automotive’s gross profit in the reported quarter increased 34.9% on a year-over-year basis to $1,231.7 million. The operating income also jumped 83.1% to $402 million.

For the March quarter, same-store retail unit sales declined 1.3% year over year to 109,218. Within the Retail Automotive segment, same-store new-vehicle revenues edged down 3% to $2,342.5 million, while same-store used-vehicle revenues rose 29.3% to $2,332.6 million.

Segmental Performance

In the reported period, revenues in the Retail Automotive segment came in at $6,029.2 million, increasing 16% from a year ago and topping the consensus mark of $5,507 million. Gross profit of $1,050.7 million increased 31.4% year over year and crossed the consensus mark of $992 million.

Revenues in the Retail Commercial Truck segment jumped 82.3% to $792.3 million and exceeded the consensus mark of $554 million. Gross profit in the segment was $141.2 million, a steep rise of 77% from the year-earlier quarter’s figure and beating the consensus mark of $107 million.

The Commercial Vehicles Australia/Power Systems segment’s revenues in the reported quarter totaled $153.9 million, up 16.4% from the year-ago quarter’s levels and crossing the consensus mark of $149 million. Gross profit came in at $39.8 million, rising 16.3% from the 2021 level but missing the Zacks Consensus Estimate of $43.07 million.

Financial Tidbits

In the quarter under review, SG&A costs totaled $797.8 million, up 20.1% year over year. Penske had cash and cash equivalents of $170.3 million as of Mar 31, 2022, up from $100.7 million in 2021 end. The long-term debt amounted to $1,383.9 million, slightly down from $1,392 million as of Dec 31, 2021.

In the reported quarter, PAG repurchased 1.2 million shares of common stock for nearly $119.2 million.   As of Apr 26, 2022, around $46.3 million remains available for repurchase under its existing share repurchase authorization.

Zacks Rank & Key Picks

PAG currently carries a Zacks Rank #3 (Hold).

Better-ranked players in the auto space include BRP Group, Inc. (DOOO - Free Report) , sporting a Zacks Rank #1 (Strong Buy) and Dorman Products (DORM - Free Report) and Standard Motor Products (SMP - Free Report) , each carrying a Zacks Rank #2 (Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

BRP Group has an expected earnings growth rate of 9.1% for fiscal 2023. The Zacks Consensus Estimate for current-year earnings has been revised around 7.9% upward in the past 60 days.

BRP Group’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. DOOO pulled off a trailing four-quarter earnings surprise of 68%, on average. The stock has declined 12.5% over the past year.

Dorman Products has an expected earnings growth rate of 18.8% for the current year. The Zacks Consensus Estimate for current-year earnings has been marginally revised 0.7% upwards in the past 60 days.

Dorman Products’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one. DORM pulled off a trailing four-quarter earnings surprise of 3.1%, on average. The stock has lost 2% over the past year.

The Zacks Consensus Estimate for Standard Motor’s current-year earnings has been revised around 1.1% upward in the past 60 days.

Standard Motor’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. SMP pulled off a trailing four-quarter earnings surprise of 60.5%, on average. The stock has declined 2.2% over the past year.