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Penske Automotive's (PAG) Q2 Earnings Surpass Estimates

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Shares of Penske Automotive Group, Inc. (PAG - Free Report) have gained more than 4.3% in a day’s trading, following its second-quarter 2018 earnings release. During the quarter under review, the company recorded adjusted earnings of $1.58 per share, which surpassed the Zacks Consensus Estimate of $1.42. The company recorded net earnings of $1.23 per share in the year-ago quarter.

Net income from continuing operations increased 27% year over year to $134.6 million in the reported quarter from $106.2 million a year ago.

Total revenues rose 10.3% year over year to $5.9 billion. Same-store retail unit sales increased 1.6% year over year to 126,484 units and retail unit sales went up 3.1% to 134,214. Penske Automotive’s diversified transportation service model enabled it to witness growth in the second quarter.

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

 

Gross profit increased 8.9% to $889.8 million from $817.3 million in the prior-year quarter, operating income grew 9.7% to $188.7 million from $172 million.

Segmental Performance

The company operates under three reportable segments namely — Retail Automotive, Retail Commercial Trucks, and Commercial Vehicles Australia/Power Systems and Other.

Revenues from Retail Automotive rose to $5.5 billion from the year-ago figure of $5 billion.

Revenues from Retail Commercial Trucks increased to $338.8 million from $228.5 million in the year-ago quarter.

In the reported quarter, revenues from Commercial Vehicles Australia/Power Systems and Other grew to $146 million from $114.2 million a year ago.

Financial Position

Penske Automotive had cash and cash equivalents of $45.8 million as of June 30, 2018, almost in line with the figure recorded as of Dec 31, 2017. Long-term debt was $2.06 billion at the end of the second quarter, which was almost in line with the year-ago figure.

Dividend & Share Repurchase

Penske Automotive’s board has approved a dividend hike to 36 cents per common share from the prior payout of 35 cents, marking the twenty-ninth consecutive quarterly dividend increase.

During the three months ended Jun 30, 2018, Penske Automotive repurchased 119,608 shares for $5.8 million or at an average price of $48.61 per share. In the first half of 2018, the company repurchased 1,252,624 shares for $55.8 million.

Zacks Rank & Other Key Picks

Penske Automotive currently carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the auto space are Fox Factory Holding Corporation (FOXF - Free Report) , Oshkosh Corporation (OSK - Free Report) and LKQ Corporation (LKQ - Free Report) . Fox Factory and Oshkosh carry a Zacks Rank of 2, while LKQ sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Fox Factory has an expected long-term growth rate of 15.8%. Over a year, shares of the company have gained 30.2%.

Oshkosh has an expected long-term growth rate of 18.3%. Over a year, shares of the company have gained 7.3%.

LKQ has an expected long-term growth rate of 15%. Shares of the company have risen 2.8% in the past year.

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