Penske Automotive Group Inc.'s (PAG) third-quarter profit rose
24% on higher margins and lower costs as the company also got a
sales boost from the government's cash-for-clunkers program.
"Our retail operations performed well," said Chairman Roger
Penske as he called cash-for-clunkers "a welcome boost to our U.S.
business." He added the company's "U.K. operation continues to
outperform in its market."
Thursday, Penske rival AutoNation Inc. (AN), the largest U.S.
car-dealership chain, swung to a third-quarter profit, helped by
cost reductions. Earlier this week, executives of Group 1
Automotive Inc. (GPI) and Sonic Automotive Inc. (SAH) expressed
optimism that a recovery is near.
The industry has slashed costs and reduced inventory, but unlike
auto manufacturers, retailers largely have the advantage of
used-vehicle sales and profitable parts and services
departments.
Penske posted profit of $27.4 million, or 30 cents a share, up
from $22.4 million, or 24 cents a share, a year earlier. Earnings
excluding restructuring and other impacts such as a $1.9 million
loss from its failed bid to acquire the Saturn brand rose to 34
cents from 28 cents.
Revenue decreased 13% to $2.59 billion, with same-store retail
sales down 12%, or 8% excluding currency changes.
Analysts surveyed by Thomson Reuters expected earnings of 28
cents on revenue of $2.56 billion.
Gross margin rose to 16.3% from 15.4%, with used-vehicle margins
jumping to 8.8% from 7.3%.
Penske early this month abandoned a plan to buy General Motors
Co.'s slumping Saturn unit. The deal collapsed after Penske failed
to get France's Renault SA (RNO.FR) to agree to supply autos.
Penske's shares closed Thursday at $16.99 and didn't trade
premarket.
-By Mike Barris and Kevin Kingsbury, Dow Jones Newswires;
212-416-2330; mike.barris@dowjones.com