Penske Automotive Group Inc.’s third-quarter earnings set records, aided by increases in overall sales, plus higher gross profits in most parts of its retail automotive business.
Net income for the nation’s second-largest automotive retailer jumped 38 percent to $130.1 million, while revenue increased 2.4 percent to $5.66 billion.
Penske, in a statement Thursday, said an $11.6 million tax benefit related to a final reconciliation of the 2017 U.S. Tax Cuts and Jobs Act also helped results. Without that benefit, adjusted income from continuing operations came in at $118.5 million, a 26 percent gain. Because of the tax changes, Penske’s tax rate also dropped to 17.3 percent in the quarter, down from 32.2 percent a year ago.
“The strength of our performance in the third quarter was driven by increases in new vehicle, used vehicle and finance and insurance gross profit per retail unit sold, coupled with a 70 basis-point increase in service and parts gross margin,” Penske CEO Roger Penske said in a statement. “Further, our U.K. business produced another record quarter on the strength of its premium brand mix and stand-alone used vehicle supercenter operations.”
Revenue from the company’s standalone used-vehicle supercenter business totaled $329.7 million on 18,568 unit sales. Penske said it plans to open two new used-vehicle only supercenters in the U.S. and two more in the U.K. next year.
The retailer saw increases in revenue across most of its automotive business lines. The gains came in used vehicles, finance and insurance, service and parts and wholesale and fleet, while new-vehicle revenue slipped. Penske also reported a revenue boost from its retail commercial trucks unit, though revenue for its smaller Australian commercial vehicles, engines and power systems business dipped during the quarter.
Records: Third-quarter records were set for revenue, net income, income from continuing operations and retail unit sales.
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