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Penske Automotive Group Inc., the second-largest U.S. automotive retailer, said third-quarter profit rose 9.3 percent as used-vehicle sales increased.
Net income climbed to $29.98 million, or 33 cents a share, from $27.4 million, or 30 cents, a year earlier, the Bloomfield Hills-based company said today in a statement. Penske was expected to earn 30 cents a share, the average estimate of three analysts in a Bloomberg survey. Sales rose 6.5 percent to $2.76 billion.
Penske reduced costs after the company closed stores and cut jobs during the recession as U.S. auto sales fell last year to the lowest since 1982. Penske's new-vehicle sales dropped 2.6 percent from last year, when it benefited from the U.S. "cash for clunkers" and a similar incentive program in the U.K.
The new vehicle retail environment was challenging during the third quarter, Chief Executive Officer Roger Penske said in the statement. "Luxury franchises and our focus on increasing used vehicle sales drove our same-store retail revenue growth."
Penske shares fell 19 cents to $13.48 at 10:37 a.m. in New York Stock Exchange composite trading. The shares dropped 9.9 percent this year through yesterday.
Volkswagen AG, whose Audi brand has accounted for 11 percent of Penske's retail sales this year, said today it expects business growth in the fourth quarter will not continue as strongly after nine-month operating profit more than tripled.
Anthony Pordon, a Penske spokesman, said dealers' Audi business has been strong.
The challenge for them has been getting enough product to meet demand in the dealerships, Pordon said in an interview. Supplies of the Audi Q5 and Q7 sport-utility vehicles have been particularly tight, he said.
Penske said this month Nissan Motor Co. will provide a five-door small car to the unprofitable Smart car-distribution business next year. The Smart will start selling in the fourth quarter of 2011, the company said Oct. 6.
Sales of the Fortwo, Smarts only model, plunged 62 percent to 4,779 through September, while industrywide new light-vehicle deliveries rose 10 percent, according to researcher Autodata Corp. A Penske Automotive Group unit, Smart USA Distributor LLC, has exclusive distribution rights in about 75 U.S. dealerships.
AutoNation Inc., the largest U.S. auto retailer, is scheduled to report third-quarter earnings on Oct. 28.
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