Penske Automotive Group, Inc. (NYSE:PAG) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company.
Penske Automotive Group, Inc. Earnings Cheat Sheet
Results: Adjusted Earnings Per Share increased 14.55% to $0.63 in the quarter versus EPS of $0.55 in the year-earlier quarter.
Revenue: Rose 4.86% to $3.4 billion from the year-earlier quarter.
Actual vs. Wall St. Expectations: Penske Automotive Group, Inc. reported adjusted EPS income of $0.63 per share. By that measure, the company beat the mean analyst estimate of $0.62. It missed the average revenue estimate of $3.48 billion.
Quoting Management: Chairman Roger Penske said, “Penske Automotive Group delivered strong operating results and record profitability in the first quarter, including double-digit growth in operating income, income from continuing operations and earnings per share. I was pleased to see our gross margin improve to 15.7% on the strength of a 3.1% increase in same-store service and parts revenue and a 60 basis-point increase in service and parts gross margin to 58.4%. Additionally, SG&A as a percent of gross profit improved 80 basis points year-over-year to 77.5% and 200 basis-points sequentially, helping drive an increase in our operating margin to 3.1%.”
Key Stats (on next page)…
Revenue increased 7.7% from $3.16 billion in the previous quarter. EPS increased 10.53% from $0.57 in the previous quarter.
Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.63 to a profit $0.64. For the current year, the average estimate has moved up from a profit of $2.46 to a profit of $2.56 over the last ninety days.
Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.
(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)