Penske Automotive Reports Record 2020 Pre-tax Earnings of $708M

Penske Automotive Group Inc. in Bloomfield Township announced $20.4 billion in revenue and $708 million in before-tax earnings in 2020, an all-time record for the company.
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Crevier BMW Penske dealership
Crevier BMW in Santa Ana, Calif. is one of Penske Automotive Group’s 150 dealerships worldwide. // Photo courtesy of Penske Automotive Group

Penske Automotive Group Inc. in Bloomfield Township announced $20.4 billion in revenue and $708 million in before-tax earnings in 2020, an all-time record for the company.

For the 12 months ended Dec. 31, 2020, the company reported revenue of $20.4 billion, a 12 percent decrease from 2019 figures. The record $708 million in pre-tax earnings reflects a 20 percent improvement from the previous year.

“Our results were driven by same-store retail automotive margin expansion, growth in our commercial truck dealership profitability, and continued strong performance from Penske Transportation Solutions,” says Roger Penske, chairman of Penske Automotive.

In the fourth quarter of 2020, Penske Automotive collected $5.8 billion in revenue (-1 percent from the third quarter) and posted pre-tax earnings of $263 million, an increase of 89 percent compared to the previous three months.

The company reported a 97 percent increase in income during the fourth quarter of 2020 from continuing operations attributable to common shareholders to $200.1 million, and a 99 percent increase in related earnings per share to $2.49. This compares to income from continuing operations attributable to common shareholders of $101.6 million, or $1.25 per share in the prior year.

Operational highlights during the fourth quarter include:

  • Retail automotive same-store revenue increased 0.6 percent.
  • Retail automotive same-store gross profit increased 5.7 percent.
  • Retail automotive earnings before taxes increased 126.5 percent.
  • Retail automotive same-store variable gross profit per unit retailed increased 24.5 percent.
  • Total gross margin increased 80 basis points to 15.5 percent.
  • Adjusted SG&A expenses declined $46.6 million and SG&A as a percentage of gross profit declined 800 basis points to 71.1 percent.

Full-year 2020 highlights:

  • Reduced long-term debt by $670 million.
  • Opened a greenfield used vehicle SuperCenter site in Nottingham, U.K. during the fourth quarter and now operates 17 Used Vehicle SuperCenters.
  • Currently constructing a new Audi dealership in southern California and a new Honda store in Texas. Both are expected to open by the end of the year and collectively generate approximately $100 million in annualized revenue.
  • Opened a second Porsche dealership in the Washington. D.C. market that is expected to generate $50 million in annualized revenue.

On Jan. 26, 2021, the company announced an increase in the quarterly dividend to $0.43 per share, payable on March 1, 2021 to shareholders of record as of Feb. 10, 2021.

During 2020, Penske Automotive repurchased 1,027,736 shares for $34.4 million. Approximately $170.6 million remains available to repurchase shares under the company’s existing share repurchase authorization.

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