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Penske Automotive Group Inc PAG
Q1 2011 Earnings Call Transcript

Transcript Call Date 04/28/2011

Operator: Good afternoon, ladies and gentlemen, and welcome to the Penske Automotive Group First Quarter 2011 Earnings Conference Call. The call today is being recorded and will be available for replay in approximately one hour after completion through May 12, 2011. Please refer to Penske Automotive's press release dated April 5, 2011, for specific information about how to access the replay. I would now like to introduce Tony Pordon, Senior Vice President of Penske Automotive Group. Please go ahead.

Anthony R. Pordon - SVP: Thank you, John. Good afternoon everyone and welcome. A press release detailing Penske Automotive's first quarter 2011 results was released this morning and is posted on our website at www.penskeautomotive.com. With me today are Roger Penske, our Chairman; Bob O'Shaughnessy, our Chief Financial Officer; and J.D. Carlson, our Controller.

Before we begin, I'd like to remind you that we may make forward-looking statements on this call. Our actual results may vary because of risk and uncertainties, including external factors such as consumer credit conditions, OEM and supplier operational issues, our transition of the Smart distribution business to MBUSA, interest rate fluctuations, consumer spending, macroeconomic factors and other factors over which the Company has no control. Any such statement should be evaluated together with the information in our public filing including our Form 10-K.

At this time, I'd like to turn the call over to Roger who will take you through our first quarter results.

Roger S. Penske - Chairman and CEO: Thank you, Tony. Good afternoon, everyone, and thanks for joining us. I'm extremely pleased with our first quarter operating performance. Our results were highlighted by 13.9% increase in retail unit sales and a 15.3% increase in total revenue. Same-store retail revenue increased 11.6% including growth in each area of our business.

Our U.K. operations generated another outstanding quarter of profitability highlighted by new vehicle unit sales that outperformed the overall U.K. market registrations in Q1. As a result, our income from continuing operations increased 51.7% to $36.4 million and earnings per share from continuing operations increased 50% to $0.39.

Looking at some of the specifics of our performance in the quarter, we retailed 71,627 units, up 13.9%. New units were up 10.8% and used were up 18.1%. Retail unit sales increased 17.9% in the U.S. and 6.3% internationally. On a same-store basis, retail unit sales increased 9.9%, new was up 17.3% and used was up 13.5%.

As a result, total revenue increased 15.3% to $2.9 billion and same-store retail revenue increased 11.6%, including 12.7% in the U.S. and 9.8% internationally. The same-store retail revenue increases include 14% in our premium/luxury franchises, 13.4% in our volume foreign franchises and 7% at our domestic franchises.

Same-store service and parts revenues increased 3.4% in the quarter including a 5% increase in the U.S. Excluding the effect of changes in foreign exchange rates, our same-store retail revenue increased 10.1%. Our revenue mix in the first quarter in the United States was 62% and internationally was 38%. Our mix of operating income was 50% from the U.S. and 50% internationally. Our brand mix Domestic Big 3 4%, volume foreign 29% and premium 67%.

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