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Penske's record service & parts revenues rose 4.6% to $863.9M, cushioning a 9.9% drop in new units.
PAG bought two Lexus dealerships and returned cash via dividends and buybacks. Long-term debt rose to $2.21B.
Penske Automotive Group, Inc. (PAG - Free Report) reported first-quarter 2026 adjusted earnings of $3.05 per share, which declined 15.0% year over year but topped the Zacks Consensus Estimate of $2.91 by 4.8%. Total revenues of $7.86 billion dipped 1.1% from the year-ago quarter and missed the consensus mark of $7.95 billion by 1.1%.
Despite softer revenues versus expectations, Penske’s Retail Automotive service and parts revenues rose 4.6% to $863.9 million, helping cushion a tougher comparison and challenging market conditions.
PAG Faces Weather and Mix Pressures in Retail Auto
In Retail Automotive, total new units delivered fell 9.9% year over year to 50,036, while used units slipped 0.6% to 60,126. Total retail units declined 5% to 110,162, reflecting a tougher demand backdrop in key markets.
Management cited U.S. weather-related disruptions early in the quarter, prior-year tariff-related pull-forward of retail sales, and softer U.S. electric-vehicle demand tied to regulatory easing and the expiration of tax credits as primary drags on new-vehicle volume.
Penske’s Pricing Holds Up as Used Revenues Rise
Even with lower new-vehicle volumes, the company posted higher used-vehicle revenues, which increased 7.3% year over year to $2.43 billion. New-vehicle revenues decreased 5.2% to $3.08 billion, while finance and insurance revenues were modestly lower at $202.3 million.
On profitability per unit, retail automotive gross profit per new vehicle (excluding agency) was $4,783, down 4.6% from the year-ago level, and used-vehicle gross profit per unit was $2,076, down 2.0%. Notably, agency units rose 21.8% to 13,011, and agency gross profit per unit improved 7.1% to $2,805, adding a steadier profit stream alongside traditional retail sales.
PAG’s Truck Segment Sees Lower Deliveries, Better Mix
Retail Commercial Truck results were pressured by lower deliveries, with total new and used units down 24% year over year to 3,583. Segment revenues decreased 15.7% to $694.6 million, and earnings before taxes fell to $36.4 million from $45.1 million a year ago.
Within the segment, service and parts provided relative stability. Service and parts revenues increased 4.6% to $232.2 million, and the segment’s total gross margin improved 140 basis points to 18.5%, even as gross profit per unit for new and used vehicles declined. Management also pointed to improving freight trends, noting industry reports showed a 91% increase in Class 8 market orders for the three months ended March 31, 2026, compared with the prior-year period.
PAG Benefits From Affiliate Earnings and Dealership Sale Gains
Below the operating line, equity in earnings of affiliates increased 22.5% year over year to $40.8 million. PAG’s equity income from its Penske Transportation Solutions investment was $41.1 million in the quarter.
The company also recorded a gain on the sale of a dealership of $60.4 million versus $52.3 million a year ago, supporting reported profitability. Income before income taxes was $323.7 million, down 7.6% year over year, while adjusted income before taxes was $276.3 million, reflecting the impact of excluded items in management’s operating view.
PAG Prioritizes M&A and Shareholder Returns
PAG continued active capital deployment during the quarter, completing acquisitions of Lexus of Orlando and Lexus of Winter Park, which are expected to add $450 million in estimated annualized revenues. Cash paid for acquisitions totaled $669.7 million, including $115 million for property and floor plans.
Shareholder returns remained in focus. The company paid $92.6 million in dividends and repurchased 170,393 shares for $26.4 million. Liquidity was approximately $1.3 billion, including $83.7 million in cash and $1.2 billion of availability under credit agreements and revolving mortgage facilities. Balance sheet leverage increased, with long-term debt rising to $2.21 billion as of March 31, 2026.
Key Releases From the Auto Space
Tesla (TSLA - Free Report) released first-quarter 2026 results on April 22. The company delivered earnings of 41 cents per share, which increased 52% year over year and came ahead of the Zacks Consensus Estimate of 36 cents by 13.04%. Tesla’s revenues rose 15.8% from the year-ago quarter to $22.39 billion and topped the Zacks Consensus Estimate of $21.92 billion by 2.12%, supported by higher vehicle deliveries and stronger Services and Other activity. Tesla expects its capital spending to exceed $25 billion this year, higher than the prior forecast of $20 billion.
Genuine Parts Company (GPC - Free Report) reported first-quarter 2026 results on April 21. The company delivered adjusted earnings of $1.77 per share, which missed the Zacks Consensus Estimate of $1.81 but improved 1.1% from the year-ago quarter. Genuine Parts posted revenues of $6.27 billion, which beat the Zacks Consensus Estimate of $6.17 billion by 1.5% and increased 6.8% year over year. The performance was driven by solid sales growth across business segments and a 20-basis-point improvement in gross margin to 37.3%. Genuine Parts expects total sales growth of 3%-5.5% and comparable sales growth of 2%-4.5% this year.
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PAG Q1 Earnings Beat Estimates on Strong Service and Parts
Key Takeaways
Penske Automotive Group, Inc. (PAG - Free Report) reported first-quarter 2026 adjusted earnings of $3.05 per share, which declined 15.0% year over year but topped the Zacks Consensus Estimate of $2.91 by 4.8%. Total revenues of $7.86 billion dipped 1.1% from the year-ago quarter and missed the consensus mark of $7.95 billion by 1.1%.
Despite softer revenues versus expectations, Penske’s Retail Automotive service and parts revenues rose 4.6% to $863.9 million, helping cushion a tougher comparison and challenging market conditions.
Penske currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Penske Automotive Group, Inc. Price, Consensus and EPS Surprise
Penske Automotive Group, Inc. price-consensus-eps-surprise-chart | Penske Automotive Group, Inc. Quote
PAG Faces Weather and Mix Pressures in Retail Auto
In Retail Automotive, total new units delivered fell 9.9% year over year to 50,036, while used units slipped 0.6% to 60,126. Total retail units declined 5% to 110,162, reflecting a tougher demand backdrop in key markets.
Management cited U.S. weather-related disruptions early in the quarter, prior-year tariff-related pull-forward of retail sales, and softer U.S. electric-vehicle demand tied to regulatory easing and the expiration of tax credits as primary drags on new-vehicle volume.
Penske’s Pricing Holds Up as Used Revenues Rise
Even with lower new-vehicle volumes, the company posted higher used-vehicle revenues, which increased 7.3% year over year to $2.43 billion. New-vehicle revenues decreased 5.2% to $3.08 billion, while finance and insurance revenues were modestly lower at $202.3 million.
On profitability per unit, retail automotive gross profit per new vehicle (excluding agency) was $4,783, down 4.6% from the year-ago level, and used-vehicle gross profit per unit was $2,076, down 2.0%. Notably, agency units rose 21.8% to 13,011, and agency gross profit per unit improved 7.1% to $2,805, adding a steadier profit stream alongside traditional retail sales.
PAG’s Truck Segment Sees Lower Deliveries, Better Mix
Retail Commercial Truck results were pressured by lower deliveries, with total new and used units down 24% year over year to 3,583. Segment revenues decreased 15.7% to $694.6 million, and earnings before taxes fell to $36.4 million from $45.1 million a year ago.
Within the segment, service and parts provided relative stability. Service and parts revenues increased 4.6% to $232.2 million, and the segment’s total gross margin improved 140 basis points to 18.5%, even as gross profit per unit for new and used vehicles declined. Management also pointed to improving freight trends, noting industry reports showed a 91% increase in Class 8 market orders for the three months ended March 31, 2026, compared with the prior-year period.
PAG Benefits From Affiliate Earnings and Dealership Sale Gains
Below the operating line, equity in earnings of affiliates increased 22.5% year over year to $40.8 million. PAG’s equity income from its Penske Transportation Solutions investment was $41.1 million in the quarter.
The company also recorded a gain on the sale of a dealership of $60.4 million versus $52.3 million a year ago, supporting reported profitability. Income before income taxes was $323.7 million, down 7.6% year over year, while adjusted income before taxes was $276.3 million, reflecting the impact of excluded items in management’s operating view.
PAG Prioritizes M&A and Shareholder Returns
PAG continued active capital deployment during the quarter, completing acquisitions of Lexus of Orlando and Lexus of Winter Park, which are expected to add $450 million in estimated annualized revenues. Cash paid for acquisitions totaled $669.7 million, including $115 million for property and floor plans.
Shareholder returns remained in focus. The company paid $92.6 million in dividends and repurchased 170,393 shares for $26.4 million. Liquidity was approximately $1.3 billion, including $83.7 million in cash and $1.2 billion of availability under credit agreements and revolving mortgage facilities. Balance sheet leverage increased, with long-term debt rising to $2.21 billion as of March 31, 2026.
Key Releases From the Auto Space
Tesla (TSLA - Free Report) released first-quarter 2026 results on April 22. The company delivered earnings of 41 cents per share, which increased 52% year over year and came ahead of the Zacks Consensus Estimate of 36 cents by 13.04%. Tesla’s revenues rose 15.8% from the year-ago quarter to $22.39 billion and topped the Zacks Consensus Estimate of $21.92 billion by 2.12%, supported by higher vehicle deliveries and stronger Services and Other activity. Tesla expects its capital spending to exceed $25 billion this year, higher than the prior forecast of $20 billion.
Genuine Parts Company (GPC - Free Report) reported first-quarter 2026 results on April 21. The company delivered adjusted earnings of $1.77 per share, which missed the Zacks Consensus Estimate of $1.81 but improved 1.1% from the year-ago quarter. Genuine Parts posted revenues of $6.27 billion, which beat the Zacks Consensus Estimate of $6.17 billion by 1.5% and increased 6.8% year over year. The performance was driven by solid sales growth across business segments and a 20-basis-point improvement in gross margin to 37.3%. Genuine Parts expects total sales growth of 3%-5.5% and comparable sales growth of 2%-4.5% this year.