Penske Automotive posts sharply higher 2nd-quarter income on vehicle sales improvement

Penske 2Q profit doubles on auto sales recovery

BLOOMFIELD HILLS, Mich. — Auto dealership chain Penske Automotive Group Inc. said Thursday its second-quarter net income more than doubled on improving sales of cars and trucks.

The recovery in new vehicle sales in the U.S. has lifted the bottom lines at major car dealership chains in the second quarter. Last week, AutoNation Inc., the country’s biggest dealership chain, posted a 30 percent increase in second-quarter net income.

Sales of new vehicles are up 17 percent for the first six months of 2010, according to industry tracker Autodata Corp.

“The improving retail environment and our premium-luxury brand mix helped drive double-digit growth in units, revenue, income from continuing operations and earnings per share in the second quarter,” Chairman Roger Penske said in a statement.

Penske, which operates 323 franchises around the country, said its net income rose to $29.4 million, or 32 cents per share, in the April-June period. That compares with $14.1 million, or 15 cents per share, a year ago.

Revenue rose 17 percent to $2.7 billion from $2.3 billion a year ago. Analysts surveyed by Thomson Reuters expected 29 cents per share on $2.7 billion in revenue, on average.

The company said sales at stores open at least a year — a key gauge of performance — rose 13 percent worldwide. The figure rose 16 percent in the U.S. and 9 percent internationally.

Its shares slipped 24 cents to $13.26 in midday trading after rising as high as $14.37 earlier in the session.