The higher income was attributable to strong performance of premium/luxury brands, offsetting the lower sales of smart USA – a fuel efficient micro car.
Revenues in the quarter rose 15.4% to $2.5 billion, driven by a 9.2% increase in retail unit sales. Same-store retail revenue went up 16.4% to $2.3 billion. Same store retail sales increased 14% in the U.S. and 20% internationally.
New Vehicle revenues fell 27% to $1.2 billion while Used Vehicle revenues went up 13% to $699 million during the quarter. Revenues inched up 2% to $335 million in the Service and Parts segment; rose 36% to $156 million Fleet and Wholesale Vehicle segment and increased 23% to $60 million in the Finance and Insurance segment. However, revenues in the Distribution segment slashed 90% to $8 million.
Penske whole saled 956 units of smart USA vehicles, significantly down from 5,714 units in the first quarter of 2009. The smart USA sales contributed to a loss of 4 cents per share in the distribution segment due to increased incentives on some smart USA models.
Penske repurchased $71.1 million of its 3.5% senior subordinated convertible notes due 2026 in open market transactions for $71.7 million in cash during the first quarter. This has left the company with $235 million of these securities outstanding. The company has $123 million remaining under its previously announced authority to repurchase its outstanding common stock, debt and convertible debt.
Penske had cash and cash equivalents of $24 million as of March 31, 2010, a significant increase from $14 million as of the year-ago period. Long-term debt amounted to $879 million as of that date. The long-term debt to capitalization ratio stood at 48%.
Read the full analyst report on “PAG”
Zacks Investment Research
