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Penske (PAG) Misses on Q4 Earnings, Raises Dividend
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Penske Automotive Group (PAG - Free Report) reported fourth-quarter 2023 adjusted earnings of $3.45 per share, which decreased 18% year over year and missed the Zacks Consensus Estimate of $3.66. The company registered net sales of $7.27 billion, which outpaced the Zacks Consensus Estimate of $7.19 billion. The top line rose 4% from the year-ago quarter's level.
Penske’s gross profit in the reported quarter remained flat on a year-over-year basis at $1.18 billion. The operating income contracted 20.8% to $265.7 million. Foreign currency transactions benefited revenues by $130 million and had a negligible impact on net income and earnings per share (EPS).
In the reported quarter, same-store retail units rose 9% year over year to 116,700. Within the Retail Automotive segment, same-store new-vehicle revenues were up 7.6% to $2.97 billion. Same-store used-vehicle revenues decreased 1% to $1.95 billion.
Penske Automotive Group, Inc. Price, Consensus and EPS Surprise
In the reported period, revenues in the Retail Automotive segment came in at $6.18 billion, up 4.5% from the year-ago quarter's level. The figure also beat our estimate of $5.81 billion. The outperformance resulted from higher-than-expected revenues from new and used vehicles. Gross profit of $1 billion fell 0.6% year over year but came ahead of our estimate of $960.5 million.
Revenues in the Retail Commercial Truck segment decreased 5.2% to $904.8 million and fell short of our estimate of $967 million. Gross profit in the segment was $143.2 million, up from $138.2 million in the year-earlier quarter. The figure also beat our expectation of $134.9 million.
The Commercial Vehicle Distribution and Other segment’s revenues in the reported quarter increased 34.7% to $189.4 million and topped our estimate of $148.5 million. Gross profit came in at $42.5 million, up from $36.2 million in the year-ago period and higher than our estimate of $36.5 million.
Financial Tidbits
In the quarter under review, SG&A costs totaled $844.1 million, up 3.5% year over year. As of Dec 31, 2023, Penske had cash and cash equivalents of $96.4 million, down from $106.5 million as of Dec 31, 2022. The long-term debt amounted to $1.42 billion, down from $1.55 billion as of Dec 31, 2022.
During the quarter under discussion, PAG repurchased 0.1 million shares of common stock for $17.6 million. As of Dec 31, 2023, $215.5 million of stock repurchase authorization remained outstanding.
Penske increased dividend by 10% to 87 cents per share, to be paid out on Mar 1, 2024 to shareholders of record as of Feb 15, 2024.
The Zacks Consensus Estimate for MOD’s 2024 sales and earnings suggests year-over-year growth of 4% and 67.2%, respectively. The EPS estimates for 2024 and 2025 have improved 22 cents each in the past seven days.
The Zacks Consensus Estimate for MBGAF’s 2023 sales implies year-over-year growth of 5.8%. The EPS estimates for 2023 and 2024 have moved up by a penny and 30 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for OSK’s 2024 sales and earnings suggests year-over-year growth of 6.7% and 4%, respectively. The EPS estimates for 2024 and 2025 have improved 16 cents and 29 cents, respectively, in the past 30 days.
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Penske (PAG) Misses on Q4 Earnings, Raises Dividend
Penske Automotive Group (PAG - Free Report) reported fourth-quarter 2023 adjusted earnings of $3.45 per share, which decreased 18% year over year and missed the Zacks Consensus Estimate of $3.66. The company registered net sales of $7.27 billion, which outpaced the Zacks Consensus Estimate of $7.19 billion. The top line rose 4% from the year-ago quarter's level.
Penske’s gross profit in the reported quarter remained flat on a year-over-year basis at $1.18 billion. The operating income contracted 20.8% to $265.7 million. Foreign currency transactions benefited revenues by $130 million and had a negligible impact on net income and earnings per share (EPS).
In the reported quarter, same-store retail units rose 9% year over year to 116,700. Within the Retail Automotive segment, same-store new-vehicle revenues were up 7.6% to $2.97 billion. Same-store used-vehicle revenues decreased 1% to $1.95 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 $6.18 billion, up 4.5% from the year-ago quarter's level. The figure also beat our estimate of $5.81 billion. The outperformance resulted from higher-than-expected revenues from new and used vehicles. Gross profit of $1 billion fell 0.6% year over year but came ahead of our estimate of $960.5 million.
Revenues in the Retail Commercial Truck segment decreased 5.2% to $904.8 million and fell short of our estimate of $967 million. Gross profit in the segment was $143.2 million, up from $138.2 million in the year-earlier quarter. The figure also beat our expectation of $134.9 million.
The Commercial Vehicle Distribution and Other segment’s revenues in the reported quarter increased 34.7% to $189.4 million and topped our estimate of $148.5 million. Gross profit came in at $42.5 million, up from $36.2 million in the year-ago period and higher than our estimate of $36.5 million.
Financial Tidbits
In the quarter under review, SG&A costs totaled $844.1 million, up 3.5% year over year. As of Dec 31, 2023, Penske had cash and cash equivalents of $96.4 million, down from $106.5 million as of Dec 31, 2022. The long-term debt amounted to $1.42 billion, down from $1.55 billion as of Dec 31, 2022.
During the quarter under discussion, PAG repurchased 0.1 million shares of common stock for $17.6 million. As of Dec 31, 2023, $215.5 million of stock repurchase authorization remained outstanding.
Penske increased dividend by 10% to 87 cents per share, to be paid out on Mar 1, 2024 to shareholders of record as of Feb 15, 2024.
Zacks Rank & Key Picks
PAG currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the auto space are Modine Manufacturing Company (MOD - Free Report) , Mercedes-Benz Group AG (MBGAF - Free Report) and Oshkosh Corporation (OSK - Free Report) . MOD sports a Zacks Rank #1 (Strong Buy), while MBGAF & OSK carry Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MOD’s 2024 sales and earnings suggests year-over-year growth of 4% and 67.2%, respectively. The EPS estimates for 2024 and 2025 have improved 22 cents each in the past seven days.
The Zacks Consensus Estimate for MBGAF’s 2023 sales implies year-over-year growth of 5.8%. The EPS estimates for 2023 and 2024 have moved up by a penny and 30 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for OSK’s 2024 sales and earnings suggests year-over-year growth of 6.7% and 4%, respectively. The EPS estimates for 2024 and 2025 have improved 16 cents and 29 cents, respectively, in the past 30 days.