By Penske Automotive Group Inc.
Date:
October 27, 2021
Penske Automotive Group Inc.’s stock (PAG) fell 2.5% in early trade Wednesday, following the company’s disappointing third-quarter financial results. The Bloomfield Hills, Michigan-based used and new car dealer reported net income of $263.4 million, or $3.92 a share, for the quarter, down from $340.1 million, or $4.61 a share, in the same period last year. Despite this decline, revenue grew by 8% to $7.448 billion from $6.921 billion a year ago.
However, the company missed expectations as the FactSet consensus was for earnings per share (EPS) of $4.04 and revenue of $7.276 billion. It is important to note that these figures include approximately $6.2 million of costs incurred as a result of severe storms, which damaged around 750 vehicles in their inventory.
CEO Roger Penske addressed the challenges faced by the industry, stating, “The new vehicle market remains solid while used vehicle supply and affordability remains challenging.” Despite these challenges, the company’s retail automotive same-store revenue saw a notable increase of 9%. This growth was primarily driven by a 15% rise in new vehicle revenue and a 4% increase in used vehicle sales. Finance and insurance remained flat, while service and parts experienced a 9% increase.
Penske Automotive Group’s stock has performed well throughout the year, with a gain of 25% to date. In comparison, the S&P 500 has gained 10.6%.
Overall, while the company fell short of expectations for the third quarter, it remains confident in its ability to navigate the current market conditions and capitalize on future opportunities.