Penske Automotive Group, Inc. (PAG) saw its shares decline after the company released its third-quarter financial results, which fell short of market expectations. While revenue for the quarter came in at $7.59 billion, representing a 2% increase, it missed the analyst consensus of $7.67 billion. Earnings per share reached $3.39, missing the street view of $3.42.
Despite the revenue shortfall, Penske Automotive highlighted positive performance in several areas. Retail automotive service and parts revenue climbed 14% to $778.0 million in the quarter, with same-store revenue rising by 7% and related gross profit increasing by 6%. This indicates strong demand for vehicle maintenance and repair services, even as overall vehicle sales faced pressure.
“New and used retail automotive gross profit per unit remained strong, retail automotive service and parts performed at record levels, the retail commercial truck business performed well, selling, general, and administrative expenses remained well controlled, and the equity income from Penske Transportation Solutions increased 14% sequentially despite continued freight challenges,” stated Roger Penske, Chair and CEO of the company.
The company’s commercial truck business, Premier Truck Group, also showed strength. Operating 46 North American retail commercial truck locations, the segment witnessed a 14% surge in retail unit sales to 6,331 units during the three months ending September 30.
As of September 30, Penske Automotive held $91.9 million in cash and equivalents and $4.822 billion in inventories. The company’s long-term debt totaled $1.132 billion at the end of the quarter.
In response to the mixed results, PAG shares were trading lower by 1.92% at $152.65 during Tuesday’s trading session. Despite the stock’s dip, the company’s strong performance in service and parts, coupled with a robust commercial truck business, could signal positive trends for Penske Automotive in the future.
