First-quarter net income at Penske Automotive Group Inc. soared 31 percent to $108.1 million, powered by profit gains across all areas of the business at the nation's second-largest auto retailer. Revenue rose 13 percent to $5.75 billion.
Penske reported gains in revenue and gross profit in all aspects of its retail automotive business -- new vehicles, used vehicles, finance and insurance, service and parts, and fleet and wholesale -- as well as in its other two business lines: retail commercial trucks and commercial vehicles Australia, power systems and other. Pretax adjusted income from continuing operations rose 16 percent to $144.3 million.
Net includes a $1 million net aftertax benefit, after a $6.4 million gain connected to the sale of five dealerships and the termination of several franchises, which was mostly offset by a $5.4 million valuation adjustment on certain properties, Penske said in a statement on Wednesday. An accounting change also added $400,000 to net income.
"The record results were driven by outstanding performance across each area of our business, demonstrating the strength of our diversified transportation services model," said Penske Chairman Roger Penske in the statement.
Some highlights:
Records: Revenue and combined new- and used-vehicle retail sales of 132,490 set records. In addition, aftertax income from continuing operations rose 30 percent to a record $180 million.
Sales: New-vehicle retail sales across all regions fell 4.7 percent to 59,262, while used-vehicle retail sales rose 18 percent to 73,228.
Same-store sales: New-vehicle sales slumped 1.6 percent to 57,925, while used-vehicle sales rose 2.5 percent to 53,315.
North America represented 53 percent of Penske's revenue mix, down from 56.5 percent a year earlier. The U.K. accounted for 38.2 percent of the mix, up from 35.9 percent. Other international revenue accounted for 8.8 percent, up from 7.6 percent.
Retail automotive operations represented 92 percent of revenue and 73 percent of pretax income.
Penske, of suburban Detroit, ranks No. 2 on Automotive News' list of the top 150 dealership groups based in the U.S., with new-vehicle retail sales of 248,800 in 2017.
