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Penske Automotive (PAG) Q4 Earnings Top Estimates, Up Y/Y

Zacks

Penske Automotive Group, Inc. PAG recorded adjusted earnings of $1.01 per share in fourth-quarter fiscal 2017 compared with 91 cents a year ago. The bottom line also surpassed the Zacks Consensus Estimate of $1. Including tax benefits, the earnings came in at $3.85.

Net income from continuing operations skyrocketed 300% to $330 million in the reported quarter from $82.6 million a year ago. Excluding tax benefits, the adjusted income from continuing operations was $86.6 million in comparison to $77.4 billion in the prior-year quarter.

Revenues rose 10.4% year over year to $5.4 billion, beating the Zacks Consensus Estimate of $5.24 billion. In comparison to fourth-quarter fiscal 2016, same-store retail unit sales declined 2.7% to 106,522 units while retail unit sales went up 7% to 119,935. The rise in revenues is driven by solid U.S. retail automotive operations and a robust commercial truck business.

Penske Automotive Group, Inc. Price, Consensus and EPS Surprise


Gross profit increased 11.1% to $808.3 million from $727.3 million in fourth-quarter fiscal 2016. Operating income grew 9.4% to $137 million from $125.2 million in the year-earlier quarter.

Fiscal 2017 Results

Penske Automotive reported earnings of $7.14 per share in fiscal 2017, up from $3.99 earned in fiscal 2016. The Zacks Consensus Estimate for the metric was $4.31.

Income from continuing operations was $613 million from $347 million a year ago. Consolidated revenues increased to $21.4 billion from $20.1 billion in fiscal 2016. Moreover, the top line exceeded the Zacks Consensus Estimate of $21.23 billion.

Segmental Performance

The company operates under three reportable segments namely Retail Automotive, Retail Commercial Trucks and Commercial Vehicles Australia/Power Systems and Other.

Revenues from Retail Automotive rose to $4.9 billion from the year-ago figure of $4.6 billion.

Revenues from Retail Commercial Trucks increased to $308 million from $218 million in the year-ago period.

Revenues from Commercial Vehicles Australia/Power Systems and Other grew to $148 million from $118 million in the comparable quarter, last year.

Financial Position

Penske Automotive had cash and cash equivalents of $45.7 million as of Dec 31, 2017, up from $24 million as of Dec 31, 2016. Long-term debt was $2.1 billion as of Dec 31, 2017, up from $1.8 billion as of Dec 31, 2016.

Share Repurchase

During fiscal 2017, Penske Automotive repurchased 302,000 shares for $12.7 million at an average price of $41.95 per share. As of Dec 31, 2017, the company had outstanding share repurchase authorization of roughly $200 million.

Zacks Rank & Key Picks

Penske Automotive carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Peugeot SA PUGOY, PACCAR Inc. PCAR and Genuine Parts Company GPC, each with a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peugeot has an expected long-term growth rate of 16.6%. Shares of the company have gained 1.3% in the last 30 days.

PACCAR has an expected long-term growth rate of 10%. The stock has seen the Zacks Consensus Estimate for quarterly earnings being revised 11.3% upward over the last 30 days.

Genuine Parts has an expected long-term growth rate of 7.2%. In the last six months, shares of the company have rallied 17%.

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