Penske Q3 2020 Earnings Report
Key Takeaways
Penske Automotive Group announced record results for Q3 2020, with income from continuing operations attributable to common shareholders reaching $246.5 million, or $3.07 per share. Revenue remained flat at $6 billion. These results were driven by same-store retail automotive revenue and margin expansion, coupled with expense reductions.
Retail automotive same-store revenue increased 3.6%.
Retail automotive earnings before taxes increased 170%.
Retail automotive same-store variable gross profit per unit retailed increased 29%.
Total gross margin increased 140 basis points to 16.0%.
Penske
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Penske Revenue by Segment
Penske Revenue by Geographic Location
Forward Guidance
Penske Automotive Group is expecting continued positive performance, with plans to expand their Used Vehicle SuperCenters.
Positive Outlook
- Strong cash flow has allowed the company to significantly reduce long-term debt.
- Lengthened maturities.
- Reduced future annual interest expense by an estimated $17 million.
- Company expects to open two additional Used Vehicle SuperCenters in the next 90 days.
- Four additional sites are under development which would increase the current footprint of SuperCenters by 40%.
Challenges Ahead
- The duration, severity and resolution of the COVID-19 pandemic.
- Government imposed restrictions on our business in light of COVID-19 or otherwise.
- Economic conditions generally.
- Conditions in the credit markets.
- Changes in interest rates and foreign currency exchange rates.
Revenue & Expenses
Visualization of income flow from segment revenue to net income