Friday, automotive retailer Penske Automotive Group, Inc. (PAG) reported a profit in the fourth-quarter turning around from a loss in the year ago, helped by strong performance in the U.K, lower SG&A expenses and cost-cutting measures.
For the fourth quarter, net income attributable to common shareholders was $18.68 million or $0.20 per share, compared to a loss of $511.94 million or $5.59 per share in the year ago. Income from continuing operations attributable to Penske Automotive Group was $19.3 million or $0.21 per share.
On average, 10 analysts polled by Thomson Reuters expected the company to earn $0.19 per share. Analysts' estimates typically exclude one-time items.
Total revenues for the quarter increased 13.4% to $2.4 billion from $2.1 billion in the prior-year period. Analysts were looking for revenue of $2.19 billion.
Total retail revenues increased 18.2% to $2.3 billion, including a same-store retail revenue increase of 15.5%. U.S. and U.K recorded 8.6% and 38.7% growth, respectively.
Segment-wise, revenue from new vehicle increased to $1.25 billion from $1.04 billion, while revenue from used vehicle increased to $648.47 million from $528.36 million last year. Service and Parts revenue slightly declined to $324.12 million from $324.41 million a year ago.
Penske Chairman Roger Penske said, "Fourth quarter results were driven by a strong performance in the U.K., as well as the continuing benefit from our cost-saving initiatives. In particular, our premium/luxury retail businesses performed well, generating a 20.4% increase in same-store new retail unit sales, including a 29.9% increase in the U.K."
During the quarter, selling, general and administrative expenses as a percentage of gross profit declined to 83.3%, due in part to the cost savings initiatives; S,G&A costs fell to $328.71 million from $968.67 million in the year-earlier quarter.
For the full-year, net income was $76.5 million or $0.83 per share, compared to a loss of $420.0 million or $4.47 per share. Income from continuing operations attributable to PAG was $83.6 million, or $0.91 per share, compared to a loss of $412.6 million or $4.39 per share.
Adjusted income from continuing operations was $80.5 million or $0.88 per share, compared to adjusted income of $92.7 million or $0.99 per share. Analysts expected full-year earnings per share of $0.85 on revenues of $9.29 billion. Total revenues decreased 18.2% to $9.5 billion from $11.6 billion.
Penske purchased $44.1 million principal amount of its 3.5% senior subordinated convertible notes due 2026 for $44.4 million in cash this February, fully utilizing its remaining securities repurchase authority. After these purchases, approximately $262 million principal amount of the 3.5% senior subordinated convertible notes due 2026 remain outstanding. The board has also authorized up to $150.0 million for buy back of its outstanding common stock, debt and convertible debt.
PAG is currently trading at $15.32, up $0.02 or 0.13%, on the NYSE.
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