Penske Automotive (PAG) Q3 Earnings & Revenues Top Estimates

Penske Automotive Group Inc. (NYSE:PAG) registered earnings of $1.10 per share in the third quarter of 2017, surpassing the Zacks Consensus Estimate of $1.07. The bottom line in the prior-year quarter was $1.03.

During the quarter, income from continuing operations rose 7.9% to $94.3 million.

Revenues increased 7.2% year over year to $5.52 billion, thereby beating the Zacks Consensus Estimate of $5.34 billion. Excluding foreign exchange, revenues increased 6.9%, driven by the 9.9% rise in total retail unit sales to 130,257. Same-store retail revenues declined 2.9% to 114,941 units.

Gross profit increased 10.5% to $822.6 million from $744.2 million in third-quarter 2016. Operating income grew 7.6% to $152.2 million from $141.5 million in the year-ago quarter.

Segment Performance

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

Revenues from Retail Automotive nudged up to $5.1 billion from $4.8 billion in the year-ago quarter.

Revenues from Retail Commercial Trucks increased to $299.6 million from $266.1 million registered in the year-ago quarter.

Revenues from Commercial Vehicles Australia/Power Systems and Other increased to $139.4 million from $113.8 million in the year-ago quarter.

Financial Position

Penske Automotive had cash and cash equivalents of $37.2 million as of Sep 30, 2017, up from $24 million as of Dec 31, 2016. Long-term debt was $2.2 billion as of Sep 30, 2017, increasing from $1.8 billion as of Dec 31, 2016.

Dividend & Share Repurchase

On Oct 11, the company’s board members approved a dividend of 33 cents per common share, up 3.1% sequentially. The increased dividend will be paid on Dec 1 to shareholders of record on Nov 10.

During the quarter, the company repurchased 252,000 shares at an average price of $39.75 per share. In October 2017, they approved a rise in repurchase authorization to $200 million.

Penske Automotive currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the auto space include PACCAR Inc (NASDAQ:PCAR) , Fox Factory Holding Corp (NASDAQ:FOXF) and Daimler AG (OTC:DDAIF) .

While PACCAR sports a Zacks Rank #1 (Strong Buy), both Fox Factory Holding and Daimler carry a Zacks Rank #2 (Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.

PACCAR, Fox Factory Holding and Daimler have a long-term expected earnings growth rate of 10%, 14.2%, and 2.8%, respectively.

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