Used Car Blues Hit Bottom Line, But Penske Speeds Ahead with Sales Growth
Portfolio Pulse from Lekha Gupta
Penske Automotive Group Inc (NYSE:PAG) reported a 4% Y/Y sales growth in Q4 FY23, reaching $7.27 billion and beating analyst expectations. The growth was driven by strong performance in retail automotive and commercial truck operations. Despite the sales growth, the company saw a decrease in operating margin and a 20.8% Y/Y drop in operating income. Adjusted EPS of $3.45 missed analyst expectations due to a non-cash goodwill impairment charge. Penske also announced a 10% increase in its quarterly dividend and repurchased 2.6 million shares in 2023.
February 07, 2024 | 6:12 pm
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Penske Automotive reported a 4% Y/Y sales growth in Q4 FY23, with a decrease in operating margin and a 20.8% drop in operating income. Adjusted EPS missed expectations due to a goodwill impairment charge. The company increased its quarterly dividend by 10% and repurchased shares.
While PAG's sales growth is positive, the decrease in operating margin and operating income, along with the missed EPS expectations, could temper investor enthusiasm. However, the increase in dividend and share repurchases signal confidence from management, potentially offsetting negative impacts.
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