Penske profit falls on higher interest costs

BLOOMFIELD HILLS–Penske Automotive Group Inc. (NYSE: PAG), an international transportation services company, announced first quarter net income of $215.2 million or $3.21 a share, down from $298.3 million or $4.31 a share in the same quarter of 2023.

Revenue was $7.45 billion, up from $7.4 billion a year earlier.

Company officials blamed the decline in profits on higher interest costs of $17.4 million, driven primarily by an increase in interest rates and higher inventory levels which increased borrowings, combined with lower equity earnings from the company’s investment in Penske Transportation Solutions due to lower commercial rental utilization, lower consumer rental revenue, higher interest rates and average debt balances, and lower gains from the sale of revenue earning vehicles, partially offset by improved operating results in full-service leasing and distribution center management.

The company’s retail automotive sales of new and used units increased 4% to 126,864, and total retail automotive revenue increased 3% to $6.5 billion. Same-store new and used units delivered increased 1% to 122,060, and same-store revenue decreased 1%. Same-store service and parts revenue and gross profit increased 5%. Total retail automotive gross profit decreased 1% to $1.1 billion, including a 4% decrease on a same-store basis.

As of March 31, Premier Truck Group operated 43 North American retail commercial truck locations. Retail unit sales declined 12% largely due to the lack of availability of inventory in the first quarter of 2024 when compared to the same period last year. For the three months ended March 31, 2024, revenue was $791.8 million compared to $895.6 million in the same period last year while a stronger sales mix drove a 190 bps increase in gross margin. Earnings before taxes was $50.5 million compared to $57.1 million in the same period in 2023.

Penske Transportation Solutions, a provider of full-service truck leasing, truck rental, contract maintenance, and logistics services, operates a managed fleet with over 442,000 trucks, tractors, and trailers under lease, rental and/or maintenance contracts. Penske Automotive Group has a 28.9% ownership interest in PTS and accounts for its ownership interest using the equity method of accounting. For the three months ended March 31, 2024, the Company recorded $32.5 million in earnings compared to $80.8 million for the same period in 2023.

To listen to a conference call discussing these results, visit

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