Penske Automotive Group Inc. (PAG) reported first quarter net income of $36.4 million from continuing operations, up 51.7% from $24 million during the corresponding period in 2010.

Consequently, earnings per share from continuing operations increased 50.0% to 39 cents per share from 26 cents per share a year ago. Per share earnings were higher than the Zacks Consensus Estimate by 8 cents. 

Revenues in the quarter increased 15.3% to $2.86 billion, mostly driven by a 13.9% rise in total retail unit sales and improving trends in the service and parts operations. Same-store retail revenue climbed up 11.6% to $2.59 billion. First quarter revenues were  higher than the Zacks Consensus Estimate of $2.80 million.

The growth in same-store revenue emanated from a 14.1% increase in used vehicles and a 12.5% increase in new vehicles. On region basis, same-store retail sales increased 12.7% in the U.S. and 9.8% in the international market. 

New Vehicle revenues surged 16.5% to $1.44 billion led by an 11.8% jump in sales to 40,030 units. Similarly, Used Vehicle revenues went up 18.3% to $823.9 million based on an 18.1% increase in sales to 31,597.

Revenues in the Service and Parts segment grew 6.8%, from $333.9 million to $356.6 million. Meanwhile, revenues increased 11.8% to $173.5 million in the Fleet and Wholesale Vehicle segment and 14.5% to $68 million in the Finance and Insurance segment.

Penske acquired three franchises, including an Audi franchise in Willoughby, Ohio, and BMW and MINI franchises in the U.K. during the first three months of 2011. With these new developments, Penske expects to add almost $100 million to its revenues on an annualized basis. Alongside, Penske plans to open Nissan and Infiniti franchises in downtown San Francisco, California during the third quarter of 2011.

On April 01, 2011, the company repurchased $87.3 million of its 3.5% Senior Subordinated Convertible Notes due 2026. However, Penske has Convertible Notes outstanding worth $63.3 million, which are redeemable any time at par. The company also has a current authorization to repurchase up to $150.0 million of its outstanding common stock, debt or convertible debt.

Penske had cash and cash equivalents of $35.2 million as of March 31, 2011, which increased substantially from $17.5 million as of December 31, 2010. Besides, long-term debt amounted to $784.3 million at the first quarter end compared with $769.3 million as of December 31, 2010.

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