Penske Automotive Group missed profit expectations for the third quarter as rising costs and adverse weather events took a toll on the automobile firm’s business.
The Bloomfield Hills, Michigan-based car dealer reported net income of $263.4 million, or $3.92 per share, for the quarter, a drop from $340.1 million, or $4.61 per share, during the same period the previous year.
However, revenue grew by 8% to $7.45 billion from $6.9 billion in the previous year, ahead of the $7.38 billion expected by analysts.
Penske's third-quarter figures were influenced by approximately $6.2 million in costs, including insurance deductibles related to around 750 hail-damaged vehicles, totaling $27 million in inventory. Severe storms impacted the company's operations and contributed to these costs.
CEO Roger Penske acknowledged the strength of the new vehicle market while recognizing challenges in the used vehicle supply and affordability. Retail automotive same-store revenue experienced a 9% rise, with new vehicle revenue up by 15%, used vehicles up by 4%, finance and insurance remaining flat, and service and parts showing a 9% increase.
Penske said it remains focused on its North American automotive and commercial truck operations, where it continues to perform strongly.
Shares of Penske were down around 1.5% by midmorning Wednesday at $141.46.