International automotive retailer Penske Automotive Group reported that second quarter income from continuing operations increased 1.2% to $40.5 million. Related earnings per share increased 2.4% to $0.43 per share.

Net income in the second quarter was $39.9 million, or $0.42 per share, compared with net income of $40.4 million, or $0.43 per share, in the prior year. Revenues of $3.4 billion in the second quarter were consistent with the prior year. Same-store retail revenues declined 5.9%, as unit sales of new vehicles fell 7.7% in the quarter.

"The second quarter was very challenging at the retail level," said Penske Automotive Group Chairman Roger Penske. "With the rise in gas prices, we saw a rapid shift in consumer demand to more fuel efficient vehicles. Overall, I am very pleased with our performance as our brand mix and diversified business played an important role in achieving growth in income from continuing operations during the quarter. I am particularly pleased to see that our same-store used vehicle unit sales increased 7.3% in the U.S., and that our worldwide new vehicle margins held at 8.4%, despite the difficult market conditions."

For the six months ended June 30, 2008, revenues increased 1.9% to $6.6 billion. Income from continuing operations for the six months was $74.4 million, which represents an 8.0% increase over adjusted income from continuing operations of $68.9 million in the prior year. Related earnings per share was $0.79 in 2008, which represents an 8.2% increase over adjusted earnings per share from continuing operations in the prior year. Net income for the six months was $73.8 million, which represents a 9.8% increase over adjusted net income of $67.2 million in the prior year.

Related earnings per share was $0.78 in 2008, which represents a 9.9% increase over adjusted earnings per share in the prior year. Adjusted 2007 earnings exclude $12.3 million ($0.13 per share) of after-tax costs relating to the redemption of the Company's 9.625% Senior Subordinated Notes in March of 2007. Reported income from continuing operations and net income for the six months ended June 30, 2007 were $56.6 million, or $0.60 per share, and $54.9 million, or $0.58 per share, respectively.

In the second quarter, smart USA Distributor, LLC (smartUSA) delivered 7,731 smart fortwos to its dealer network, raising the full year wholesale delivery total to 12,646 vehicles. During the quarter, the 2008 smart fortwo was awarded the highest ratings from the Insurance Institute for Highway Safety (IIHS) for front and side crash worthiness. Commenting on smartUSA, Penskesaid, "The smart distribution business continues to perform well. In particular, I am extremely pleased with the IIHS safety ratings earned by the smart fortwo. Based in part on the outstanding IIHS crash test ratings and the recent rise in gas prices, we received more than 20,000 advance reservations for the fortwo in May and June."

During the second quarter, the Company did not effect any repurchases under its previously announced share buyback authority. The Company currently projects earnings from continuing operations for the year to be in the range of $1.54 to $1.60. Earnings per share information in 2008 is based on an estimated average of 95.0 million shares outstanding.

Penske Automotive Group, Inc, headquartered in Bloomfield Hills, Michigan, operates 308 retail automotive franchises, representing more than 40 different brands, and 27 collision repair centers.

Courtesy: Penske Automotive Group, Inc

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Posted by Naresh Koshti on 31 July, 2008 10:20:49 AM IST #