Penske Automotive Group Inc., the Bloomfield Township-based diversified international transportation services company, reports that its overall third-quarter revenue increased 8 percent to $7.4 billion.
That performance is based on a 9 percent increase in retail same-store revenue, a 15 percent increase in new vehicle sales, a 4 percent bump in used vehicle sales, and a 9 percent increase in the service and parts operations.
Pulling in the other direction, retail commercial truck same-store revenue decreased 9 percent, new commercial vehicle truck sales dipped 12 percent, and used trucks dropped 9 percent.
“Our diversified business produced another solid quarter of profitability,” says Roger Penske, char and CEO of Penske Automotive. “The new vehicle market remains solid while used vehicle supply and affordability remains challenging. I am particularly pleased with the 9 percent increase in same-store service and parts revenue. Additionally, our equity income from Penske Transportation Solutions (PTS) improved sequentially as long-term contract sales remain strong.”
PTS provides full-service truck leasing, truck rental, contract maintenance, and logistics services. It operates a managed fleet with more than 442,000 trucks, tractors, and trailers under lease, rental and/or maintenance contracts. Penske Automotive Group has a 28.9 percent ownership interest in PTS and accounts for its ownership interest using the equity method of accounting.
For the three and nine months that ended Sept. 30, the company respectively recorded $84.1 million and $238.3 million in earnings compared to $135.5 million and $390.6 million for the same periods in 2022.
The year-over-year declines are due to higher interest costs of $64 million for the three months and $154 million for the nine months ended Sept. 30, higher maintenance expenses of $40 million for the three months and $170 million for the nine months ended Sept. 30, a decrease in commercial and consumer rental utilization, and a decrease in the gain on sales of vehicles.
Penske’s retail automotive dealerships increased their Q3 deliveries 12 percent to nearly 122,800 units resulting in a 10 percent revenue increase to $6.3 billion.
Based on the company’s earnings and cash flow, its board of directors increased the quarterly dividend four times in 2023 from $0.57 per share to $0.79 per share, representing an increase of 39 percent. During the nine months ended Sept. 30, the company repurchased 2.5 million shares of common stock for approximately $341.1 million under its securities repurchase program and also acquired 168,103 shares of common stock for $23.4 million from employees in connection with a net share settlement feature of employee equity awards.
At the close of Q3, $233.1 million remained available under the company’s existing repurchase authority.
