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Penske Automotive reports 23% benefit in Q4 net income



 

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Jamie LaReau

Automotive News
February 11, 2015 – 10:20 am ET
UPDATED: 2/11/15 1:40 pm ET – adds Penske comments

Strong year-end automobile sales, gains in use and tools sum margins and investments in U.S. blurb automobile businesses pushed Penske Automotive Group Inc. to a 23 percent benefit in net income during a fourth quarter.

The nation’s second-largest dealership organisation said today it posted boost of $73.2 million during a entertain vs. $59.7 million during a same entertain final year. Revenue increasing 16 percent to $4.41 billion during a quarter.

Penske Automotive pronounced it was helped by a stronger opening in all areas of a business: new vehicles, used vehicles, tools and use and financial and insurance.

Fourth-quarter handling income rose 12 percent to $119.4 million.

The altogether formula seemed to be in line with researcher expectations, though Penske Automotive shares fell 6.7 percent to $48.69 as of 1:40 p.m. ET.

Penske predictions

Chairman Roger Penske predicts 2015 will be a clever year dominated by sales of SUVs and pickups.

“I go along with a predictions we’ll see about 17 million units sold, though we consider a brew will be 50 to 55 percent SUV and pickup trucks,” Penske pronounced in an talk currently with Automotive News.

The aloft lorry volume approaching will not change a brew Penske bonds since a high-end oppulance patron has always had a high direct for trucks regardless of gasoline prices, so “we can’t get adequate of those models, typically.”

As to a volume brands, Penske said, “We’ll trade with a market. We’ll see some-more SUVs and trucks in a brew as we make a projections and sequence brazen with a supply given by a manufacturers.”

Penske pronounced seductiveness rates are approaching to sojourn low, fuel prices will also be cheap, though consumer certainty high.

Penske pronounced his association has a three-prong merger proceed to a expansion this year that centers on a U.S., western Europe and blurb automobile dealership purchases.

Gains all around 

In an progressing statement, Penske pronounced a association had clever gains in sell sales from a U.S. and U.K. dealerships. The U.S. accounts for about 64 percent of Penske’s income mix, a U.K. is only some-more than 31 percent and other general land consecrate roughly 5 percent.

Same-store sell income increasing 8.3 percent and Penske had a 90-basis-point boost in use and tools sum domain to 59.7 percent.

“Strong formula opposite a sell automotive dealership business and a U.S.-based blurb automobile dealership business were partially equivalent by a Australian operations that were impacted by severe mercantile conditions and post-acquisition restructuring costs within a Power Systems business,” Penske pronounced in a media statement.

Penske Automotive also reported clever formula for all of 2014. Full-year net income rose 18 percent to $290.1 million, and handling income rose 17 percent to $504.1 million, as income rose 19 percent to $17.18 billion.

During a fourth quarter, Penske Automotive’s sell sales volume rose 11 percent as a association retailed 54,168 new vehicles and 44,083 used vehicles. For a full year, sum volume rose 11 percent with 216,462 new vehicles and 181,894 used vehicles retailed.

On a same-store basis, for a year, sell automobile sales rose 7 percent in 2014 to 379,121. The retailer’s same-store new-vehicle sell sales rose 8 percent in a fourth entertain to 51,900.

Added investments 

Penske Automotive acquired some-more than $1 billion in annualized income in 2014, adding $225 million in annualized income from automobile dealership acquisitions, $600 million to $700 million in blurb automobile dealership purchases and $200 million to $225 million in a blurb automobile placement business it bought in Australia.

Last week, Penske announced that it acquired dual blurb automobile dealerships in Tennessee, Freightliner of Knoxville and Freightliner of Chattanooga, that are approaching to minister estimated annualized revenues of approximately $200 million.

Additionally, a association acquired a Land Rover sell automotive dealership in Darien, Conn., with estimated annualized revenues of approximately $50 million.

Balanced approach

In a interview, Roger Penske pronounced this year will be a year of offset acquisitions in 3 areas. The initial is shopping reward oppulance and volume unfamiliar code dealerships in a United States. But, he said, there is singular supply of such dealerships, that has driven prices up.

Penske also skeleton to snap adult identical dealerships in a U.K. and Western Europe to enhance a company’s participation in those dual markets.

“Several manufacturers have asked us to deposit in Western Europe where they see these markets branch around,” Penske said. “Those are opportunities for us there.”

The third partial of Penske’s merger plan will be to buy some-more blurb automobile dealerships, he said.

“We’ve done a joining to a Freightliner code to grow in a complicated avocation lorry area. It’s a smaller marketplace than automotive retail,” Penske said. “We also see valuations reduce there than in a sell automobile side. Our partner, Freightliner, is meddlesome in consolidating in that space. We’ve aligned ourselves with them on a going-forward basis.”

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