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Penske Automotive Group Inc., the second-largest U.S. automotive retailer, said fourth-quarter profit rose 53 percent, exceeding analysts' estimates, as luxury vehicle sales increased. Net income climbed to $28.5 million from $18.7 million a year earlier, the Bloomfield Hills-based company said today.
It said it lost $15.9 million on an after-tax basis in 2010 on its Smart car business.
The firm announced Monday that it was exiting the Smart car distribution business, which will be taken over by Daimler AG's Mercedes-Benz luxury car division. Mercedes makes the iconic Smart two-seaters and handles their distribution in the rest of the world, reported The Detroit News.
Roger Penske, chief executive of Penske Automotive, said on a conference call with analysts that he could not provide an exact estimate of the financial impact of the end of the deal with Daimler.
But he said the auto retailing firm spent $7.5 million in 2010 and $3 million in the first quarter of 2011 on a previously agreed deal to have Nissan Motor Co. produce a Smart subcompact. That agreement has been canceled.
Penske Automotive expects to repurchase some Smart vehicle inventory from U.S. dealers and resell it to Daimler, which will take over Smart distribution in the United States at the end of the second quarter.
In the first quarter of 2011, Penske earned 32 cents a share, excluding some items, exceeding the 26 cents average estimate of seven analysts in a Bloomberg survey. Sales rose 13 percent to $2.77 billion.
Penske's stores selling import and luxury vehicles, including the namesake brands of BMW AG and Toyota Motor Corp., account for more than 90 percent of revenue.
U.S. auto sales gained 11 percent last year to 11.6 million deliveries from a 27-year low in 2009, according to Woodcliff Lake, New Jersey-based Autodata Corp. Penske Automotive said new-vehicle sales at its stores increased 10 percent last year.
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