Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $7.7 billion, consistent with Q2 2024, impacted by strategic divestitures of approximately $200 million in revenue [6][10] - Earnings before tax (EBT) increased by 4%, net income also increased by 4%, and earnings per share rose by 5% compared to 2024 [7] - Gross profit increased to $1.3 billion, with a gross profit margin of 16.9%, marking the eighth consecutive quarter of stable gross margin [8][9] - Selling, general and administrative expenses as a percentage of gross profit improved to 69.9%, a 30 basis point improvement [9] Business Line Data and Key Metrics Changes - North American retail automotive service and parts gross profit increased by 9%, with same-store service and parts revenue up by 7% [13] - Premier Truck Group sold 5,339 new and used units, with new units up 4% and used units down 8%, but used truck grosses increased over 50% [17] - Penske Transportation Solutions (PTS) revenue was $2.8 billion, with full-service revenue and contracts increasing by 4% [19] Market Data and Key Metrics Changes - In the U.K., new vehicle sales declined by 16% due to macroeconomic challenges and reduced incentives [21] - Same-store used units in the U.K. declined by 23%, attributed to the realignment of used-only dealerships [22] - In Australia, three Porsche dealerships generated $128 million in revenue, with a nearly one-to-one used-to-new ratio [24] Company Strategy and Development Direction - The company emphasizes diversification, with 61% of revenue from North America, 29% from the U.K., and 10% from other international markets [10] - The company is focused on capital allocation, with a disciplined approach to share buybacks and dividends, having increased dividends by 4.8% [29][30] - The acquisition of a Ferrari dealership in Modena, Italy, aligns with the company's strategy to enhance its premium brand presence [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the resilience of the business and the benefits from recent trade agreements [9][10] - The company anticipates improvements in used vehicle sourcing due to increasing lease returns starting in 2026 [12] - Management noted that the operating environment in the U.K. remains challenging due to inflation and interest rates impacting consumer affordability [21] Other Important Information - The company generated $472 million in cash flow from operations for the first half of 2025, with EBITDA over $1.5 billion on a trailing twelve-month basis [28] - The company has a backlog of $350 million for 2025 delivery in its commercial vehicle and power systems business [27] - The company has returned over $2.5 billion to shareholders through dividends and share repurchases over the last four years [29] Q&A Session Summary Question: Can you quantify the moving pieces affecting unit sales in the U.S. and the U.K.? - Management noted approximately $200 million in revenue loss due to divestitures and store closures, impacting new and used vehicle units sold [40][41] Question: What about the impact of mobility credits in the U.K.? - Management indicated that mobility credits were slowed down by certain brands, but expect recovery in the current quarter [44] Question: How do you see GPU trajectory and adjustments from OEMs regarding warranty claims? - Management stated that warranty claims are not seeing adjustments from OEMs, but customer demand remains strong [88] Question: What is the outlook for capital allocation with the additional cash flow? - Management indicated that the additional cash flow provides more opportunities for capital allocation, including share buybacks and acquisitions [111] Question: Is the $1.5 billion acquisition target still realistic? - Management suggested that while the target may not be realistic for 2025, they remain focused on acquisitions and organic growth [120][123]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $7.7 billion, consistent with Q2 2024, impacted by strategic divestitures of approximately $200 million in revenue [6][7] - Earnings before taxes (EBT) increased by 4%, net income also increased by 4%, and earnings per share rose by 5% compared to 2024 [7] - Gross profit increased to $1.3 billion, with a gross profit margin of 16.9%, marking the eighth consecutive quarter of stable gross margin [8][9] - Selling, general and administrative expenses as a percentage of gross profit improved by 30 basis points to 69.9% [9] Business Line Data and Key Metrics Changes - North American retail automotive service and parts gross profit increased by 9%, with same-store service and parts revenue up by 7% [14] - Premier Truck Group's new unit sales increased by 4%, while used unit sales decreased by 8%, but used truck grosses increased over 50% [17] - Penske Transportation Solutions (PTS) revenue was $2.8 billion, with full-service revenue and contracts increasing by 4% [19] Market Data and Key Metrics Changes - Approximately 61% of revenue is generated in North America, 29% in the UK, and 10% from other international markets [11] - In the UK, new unit deliveries declined by 16% due to OEM product changes and reduced incentives [21] - Same-store used units in the UK declined by 23%, attributed to the realignment of the company's used-only dealerships [22] Company Strategy and Development Direction - The company focuses on diversification across retail automotive and commercial truck industries, leveraging a highly variable cost structure [12][34] - Recent trade agreements, particularly with the EU, are expected to benefit major partners by enhancing U.S. production exports [10] - The company is actively pursuing acquisitions and has a pipeline for potential M&A opportunities [104][112] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business and the benefits of diversification, cost control, and a strong balance sheet [34] - The operating environment remains fluid, with OEMs adjusting pricing strategies amid tariff negotiations [10][42] - Management anticipates a gradual improvement in used vehicle sourcing as lease returns increase in 2026 [13] Other Important Information - The company generated $472 million in cash flow from operations for the first half of 2025, with a trailing twelve-month EBITDA of over $1.5 billion [27] - The dividend was increased by 4.8% to $1.32 per share, marking the nineteenth consecutive quarterly increase [29] - The company has a backlog of $350 million for 2025 delivery in its commercial vehicle and power systems business [25] Q&A Session Summary Question: Can you quantify the moving pieces affecting unit sales in the US and the UK? - Management noted approximately $200 million in revenue loss due to divestitures and store closures, impacting new and used vehicle units sold [38][40] Question: What about the impact of the UK market? - The UK faced challenges with mobility credits and OEMs suspending wholesales, affecting premium sector sales [42] Question: How do you see GPU trajectory and cadence throughout the quarter? - Management indicated stable grosses throughout the quarter, with the highest in April, and noted a potential for gross compression moving forward [62] Question: What is the outlook for capital allocation with the additional cash flow? - Management stated that the additional cash flow provides more opportunities for capital allocation, including share buybacks and acquisitions [100][103] Question: Is the $1.5 billion acquisition target still realistic? - Management indicated that while the target may not be met, they remain focused on organic growth and acquisitions [110][112]

Financial Performance - Revenue remained relatively flat at $7662 million for Q2 2025 compared to $7697 million in Q2 2024, while six-month revenue increased by 1% to $15267 million[15] - Income attributable to common stockholders increased by 4% to $250 million in Q2 2025 and by 8% to $494 million for the six months ended June 30, 2025[15] - Penske Transportation Solutions (PTS) equity earnings increased to $535 million in Q2 2025 from $529 million, and $867 million for the six months ended June 30, 2025[14,47] - Adjusted EBITDA for the six months ended June 30, 2025, was $773 million, a 48% increase compared to $7379 million in the same period of 2024[55] Retail Automotive - Retail automotive same-store revenue decreased by 1% to $6319 million in Q2 2025[21] - Gross margin increased by 50 bps to 169%[14] - Same-store retail automotive service and parts revenue increased by 7%, with related gross profit up by 9%[14] Retail Commercial Trucks - Retail commercial truck revenue increased to $944 million in Q2 2025 from $892 million in Q2 2024[31] - Same-store total units decreased by 4% to 4995 in Q2 2025[32] - Same-store used units gross per unit increased by 56% to $7016[32] Capital Allocation - Dividends paid were $165 million for the six months ended June 30, 2025[9] - Share repurchases totaled $133 million for the six months ended June 30, 2025[9] - Capital expenditures were $147 million for the six months ended June 30, 2025[9]

[Financial & Operational Highlights](index=1&type=section&id=PENSKE%20AUTOMOTIVE%20GROUP%20REPORTS%20QUARTERLY%20RESULTS) [Q2 2025 Financial & Operational Performance](index=1&type=section&id=Second%20Quarter%202025%20Operating%20Highlights) PAG reported flat Q2 2025 revenue at $7.7 billion, with gross profit up 3% to $1.3 billion, net income up 4% to $250 million, and EPS up 5% to $3.78 Q2 & H1 2025 Key Financial Results (vs. Prior Year) | Metric | Q2 2025 | Q2 2024 | % Change | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $7.7B | $7.7B | 0.0% | $15.3B | $15.1B | +1.0% | | Gross Profit | $1.3B | - | +3.0% | $2.57B | $2.51B | +2.2% | | Net Income (to Common Stockholders) | $250.0M | $241.2M | +4.0% | $494.3M | $456.4M | +8.0% | | Earnings Per Share (EPS) | $3.78 | $3.61 | +5.0% | $7.44 | $6.81 | +9.0% | Q2 2025 Same-Store Operating Highlights (vs. Q2 2024) | Metric | Change | | :--- | :--- | | Retail Automotive Revenue | -1% | | Retail Automotive Gross Profit | +3% | | Service & Parts Revenue | +7% | | Service & Parts Gross Profit | +9% | | Overall Gross Margin | +50 bps | | SG&A as % of Gross Profit | -30 bps | - Management highlighted that the strong results were driven by **gross margin expansion** and **improved SG&A leverage** The company's diversification across premium brands, geographic markets (U.S. and international), and business lines (new/used vehicles, service, F&I) provides resilience against market changes like potential tariffs[3](index=3&type=chunk) [Segment Performance](index=3&type=section&id=Segment%20Performance) [Retail Automotive Dealerships](index=3&type=section&id=Retail%20Automotive%20Dealerships) Retail Automotive revenue decreased 1% to $6.5 billion in Q2 2025, but gross profit rose 3% to $1.1 billion, primarily from a 9% increase in service and parts gross profit Retail Automotive Performance - Q2 2025 vs Q2 2024 | Metric | Q2 2025 | Change (YoY) | | :--- | :--- | :--- | | Total Revenue | $6.5B | -1% | | Total Gross Profit | $1.1B | +3% | | New Units Delivered | - | -6% | | Used Units Delivered | - | -16% | | Same-Store Service & Parts Gross Profit | - | +9% | - The **27% decrease** in international used unit sales was largely due to the realignment of the U.K. Sytner Select dealerships, which now focus on **higher margins and lower costs** rather than volume[6](index=6&type=chunk) [Retail Commercial Truck Dealerships](index=3&type=section&id=Retail%20Commercial%20Truck%20Dealerships) Retail Commercial Truck revenue increased 6% to $943.6 million in Q2 2025, with retail unit sales up 2%, and earnings before taxes growing to $54.2 million Retail Commercial Truck Performance - Q2 2025 vs Q2 2024 | Metric | Q2 2025 | Change (YoY) | | :--- | :--- | :--- | | Revenue | $943.6M | +6% | | Same-Store Revenue | - | 0% (Flat) | | Retail Unit Sales | 5,339 | +2% | | Same-Store Unit Sales | - | -4% | | Earnings Before Taxes | $54.2M | +4.8% | [Penske Transportation Solutions (PTS) Investment](index=3&type=section&id=Penske%20Transportation%20Solutions%20Investment) PAG recorded $53.5 million in equity earnings from its 28.9% stake in PTS for Q2 2025, driven by higher leasing and maintenance revenue, despite declines in truck rental and used truck sales - PAG has a **28.9% ownership stake** in PTS, which operates a managed fleet of **over 414,000 trucks, tractors, and trailers**[9](index=9&type=chunk)[14](index=14&type=chunk) Equity Earnings from PTS Investment | Period | 2025 | 2024 | | :--- | :--- | :--- | | Q2 Earnings | $53.5M | $52.9M | | H1 Earnings | $86.7M | $85.4M | [Corporate Development & Capital Allocation](index=3&type=section&id=Corporate%20Development%2C%20Capital%20Allocation%2C%20Liquidity%2C%20and%20Leverage) [Share Repurchases, Dividends, and Liquidity](index=3&type=section&id=Corporate%20Development%2C%20Capital%20Allocation%2C%20Liquidity%2C%20and%20Leverage) In H1 2025, PAG repurchased 885,272 shares for $133.3 million, increased its quarterly dividend by 4.8% to $1.32, and maintained strong liquidity of $2.3 billion with a 1.2x leverage ratio - Share Repurchases: Repurchased **885,272 shares** (**1.3% of outstanding**) for **$133.3 million** in H1 2025 **$295.7 million** remains available under the repurchase program[10](index=10&type=chunk)[11](index=11&type=chunk)[35](index=35&type=chunk) - Dividend Increase: The quarterly dividend was increased by **4.8%** to **$1.32 per share**, representing a **3.1% forward yield** and the **19th consecutive quarterly increase**[12](index=12&type=chunk) - Liquidity and Leverage: The company has approximately **$2.3 billion** in liquidity and a leverage ratio of **1.2x** as of June 30, 2025[11](index=11&type=chunk) - Acquisition: Completed the acquisition of a Ferrari dealership in Italy with expected annualized revenue of **$40 million** in July 2025[12](index=12&type=chunk) [Consolidated Financial Statements](index=8&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Condensed Statements of Income](index=8&type=section&id=PENSKE%20AUTOMOTIVE%20GROUP%2C%20INC.%20Consolidated%20Condensed%20Statements%20of%20Income) Q2 2025 revenue was flat at $7.66 billion, with gross profit up 2.6% to $1.30 billion, and net income up 3.6% to $250.0 million, resulting in $3.78 EPS Consolidated Income Statement Summary - Q2 2025 vs Q2 2024 (in Millions) | Account | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $7,662.3 | $7,696.7 | (0.4)% | | Gross Profit | $1,296.6 | $1,264.1 | 2.6% | | Operating Income | $348.2 | $338.0 | 3.0% | | Income Before Taxes | $336.9 | $325.5 | 3.5% | | Net Income to Common Stockholders | $250.0 | $241.2 | 3.6% | [Consolidated Condensed Balance Sheets](index=9&type=section&id=PENSKE%20AUTOMOTIVE%20GROUP%2C%20INC.%20Consolidated%20Condensed%20Balance%20Sheets) As of June 30, 2025, total assets reached $17.39 billion, up from $16.72 billion, with inventories at $4.85 billion and total equity at $5.63 billion Balance Sheet Summary (in Millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $155.3 | $72.4 | | Inventories | $4,849.6 | $4,640.2 | | Total Assets | $17,393.4 | $16,720.9 | | Total Liabilities | $11,762.0 | $11,493.6 | | Total Equity | $5,631.4 | $5,227.3 | [Consolidated Operations Selected Data](index=10&type=section&id=PENSKE%20AUTOMOTIVE%20GROUP%2C%20INC.%20Consolidated%20Operations%20Selected%20Data) Q2 2025 saw North America's revenue share rise to 61.8%, total gross margin improve to 16.9%, and SG&A as a percentage of gross profit improve to 69.9% Q2 2025 Revenue & Gross Profit by Segment (in Millions) | Segment | Revenue | Gross Profit | | :--- | :--- | :--- | | Retail Automotive | $6,517.5 | $1,108.8 | | Retail Commercial Truck | $943.6 | $143.6 | | Commercial Vehicle Distribution & Other | $201.2 | $44.2 | Q2 Geographic Revenue Mix | Region | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | North America | 61.8% | 59.8% | | U.K. | 27.2% | 31.2% | | Other International | 11.0% | 9.0% | [Detailed Operational Metrics](index=12&type=section&id=Detailed%20Operational%20Metrics) [Retail Automotive Operations (Total & Same-Store)](index=12&type=section&id=PENSKE%20AUTOMOTIVE%20GROUP%2C%20INC.%20Retail%20Automotive%20Operations) Q2 2025 total retail automotive unit sales declined 11.9%, but gross profit per used vehicle surged 27.7% to $2,326, and service and parts gross profit rose 9.4% Q2 2025 Total Retail Automotive Performance Highlights | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Units Retailed | 102,545 | 116,432 | (11.9)% | | Service & Parts Revenue | $816.6M | $752.8M | +8.5% | | Gross Profit per Used Vehicle | $2,326 | $1,822 | +27.7% | | Service & Parts Gross Margin | 58.9% | 58.4% | +50 bps | Q2 2025 Same-Store Retail Automotive Performance Highlights | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Same-Store Revenue | $6,318.9M | $6,400.6M | (1.3)% | | Total Same-Store Gross Profit | $1,080.1M | $1,048.4M | +3.0% | | Same-Store Service & Parts Gross Profit | $469.0M | $431.1M | +8.8% | [Retail Commercial Truck Operations (Total & Same-Store)](index=18&type=section&id=PENSKE%20AUTOMOTIVE%20GROUP%2C%20INC.%20Retail%20Commercial%20Truck%20Operations) Q2 2025 total commercial truck revenue grew 5.7%, driven by new vehicle revenue, with gross profit per used vehicle surging 56.3%, despite a slight 0.6% decline in total gross profit Q2 2025 Total Retail Commercial Truck Performance Highlights | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $943.6M | $892.3M | +5.7% | | Total Gross Profit | $143.6M | $144.5M | (0.6)% | | Gross Profit per New Vehicle | $7,889 | $8,765 | (10.0)% | | Gross Profit per Used Vehicle | $7,037 | $4,502 | +56.3% | Q2 2025 Same-Store Retail Commercial Truck Performance Highlights | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Same-Store Revenue | $883.9M | $887.3M | (0.4)% | | Total Same-Store Gross Profit | $135.6M | $143.1M | (5.2)% | | Same-Store New Vehicle Gross Profit | $33.2M | $39.0M | (14.9)% | [Supplemental Information](index=23&type=section&id=Supplemental%20Information) [Supplemental Data](index=23&type=section&id=PENSKE%20AUTOMOTIVE%20GROUP%2C%20INC.%20Supplemental%20Data) Q2 2025 retail automotive revenue from premium brands was 72%, with $93.3 million in share repurchases, and new vehicle days' supply at 57 days - The retail automotive revenue mix remains heavily weighted towards premium brands, which constituted **72% of revenue** in Q2 2025, consistent with the prior year[35](index=35&type=chunk) Inventory Days' Supply | Vehicle Type | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | New Vehicle | 57 days | 49 days | | Used Vehicle | 44 days | 47 days | Q2 2025 Capital Allocation (in Millions) | Item | Amount | | :--- | :--- | | Capital Expenditures | $70.8 | | Stock Repurchases | $93.3 | [Non-GAAP Reconciliations](index=25&type=section&id=PENSKE%20AUTOMOTIVE%20GROUP%2C%20INC.%20Consolidated%20Non-GAAP%20Reconciliations) H1 2025 GAAP net income of $494.3 million and EPS of $7.44 are adjusted for a $52.3 million gain and $25.2 million in impairments, yielding adjusted net income of $476.3 million and EPS of $7.17 H1 2025 GAAP to Non-GAAP Reconciliation | Metric | Reported (GAAP) | Adjustments | Adjusted (Non-GAAP) | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Net Income | $494.3M | ($18.0M) | $476.3M | +4.4% | | EPS | $7.44 | ($0.27) | $7.17 | +5.3% | - Adjustments for H1 2025 include excluding a **$38.9 million** after-tax gain on a dealership sale and adding back **$20.9 million** in after-tax impairments and other charges[39](index=39&type=chunk)

Core Insights - Penske Automotive reported revenue of $7.66 billion for the quarter ended June 2025, a decrease of 0.5% year-over-year, with EPS at $3.78, up from $3.61 in the previous year [1] - The revenue fell short of the Zacks Consensus Estimate of $7.87 billion, resulting in a surprise of -2.63%, while the EPS exceeded expectations by +6.18% [1] Financial Performance Metrics - Retail Automotive Gross Profit Per Vehicle Retailed for new vehicles was $5,443, surpassing the average estimate of $5,125.47 [4] - Retail Commercial Truck Revenue Per Vehicle Retailed for new vehicles was $141,345, exceeding the average estimate of $138,729.90 [4] - Retail Automotive Units for used retail were 54,999, below the average estimate of 62,109 [4] - Retail Automotive Revenue Per Vehicle Retailed for new vehicles was $61,340, compared to the estimated $56,292.94 [4] - Revenue from Retail Automotive for new vehicles was $2.94 billion, lower than the estimated $3.13 billion, reflecting a -1.8% change year-over-year [4] - Revenue from Retail Automotive for fleet and wholesale was $358.1 million, below the estimated $376.45 million, representing a -6.3% change year-over-year [4] - Revenue from Retail Automotive for service and parts was $816.6 million, exceeding the estimate of $791.44 million, with a year-over-year change of +8.5% [4] - Revenue from Retail Automotive for finance and insurance was $200.5 million, compared to the estimated $208.12 million, reflecting a -3.9% change year-over-year [4] - Revenue from Retail Automotive for used vehicles was $2.2 billion, below the estimated $2.27 billion, representing a -3.3% change year-over-year [4] - Total Revenue from Retail Automotive was $6.52 billion, lower than the estimated $6.78 billion, indicating a -1.5% change year-over-year [4] - Revenue from Retail Commercial Truck was $943.6 million, exceeding the estimated $906.79 million, with a +5.8% change year-over-year [4] - Revenue from Commercial Vehicle Distribution and Other was $201.2 million, surpassing the estimated $195.44 million, reflecting a +6.5% change year-over-year [4] Stock Performance - Penske's shares have returned -5.5% over the past month, contrasting with the Zacks S&P 500 composite's +3.4% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Group 1 - Penske Automotive reported quarterly earnings of $3.78 per share, exceeding the Zacks Consensus Estimate of $3.56 per share, and showing an increase from $3.61 per share a year ago, resulting in an earnings surprise of +6.18% [1] - The company posted revenues of $7.66 billion for the quarter ended June 2025, which was a 2.63% miss compared to the Zacks Consensus Estimate, and a slight decrease from $7.7 billion year-over-year [2] - Penske shares have increased by approximately 10.2% since the beginning of the year, outperforming the S&P 500's gain of 8.3% [3] Group 2 - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The trend of estimate revisions for Penske was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] - The current consensus EPS estimate for the upcoming quarter is $3.51 on revenues of $7.69 billion, and for the current fiscal year, it is $13.73 on revenues of $30.78 billion [7] Group 3 - The Automotive - Retail and Whole Sales industry, to which Penske belongs, is currently ranked in the bottom 35% of over 250 Zacks industries, which may negatively impact stock performance [8] - Worksport Ltd., another company in the same industry, is expected to report a quarterly loss of $0.76 per share, reflecting a year-over-year change of +49.3%, with revenues anticipated to be $4.07 million, up 112% from the previous year [9]

Core Insights - Penske Automotive Group reported a record gross profit of $1.3 billion, reflecting a 3% increase year-over-year [1] - The company achieved a 4% increase in earnings before taxes to $337 million and a 5% increase in earnings per share to $3.78 [1] - Revenue remained flat at $7.7 billion compared to the same period in 2024, with net income attributable to common stockholders increasing by 4% to $250 million [1][3] Financial Performance - For the second quarter of 2025, total revenue was $7.7 billion, unchanged from the previous year, while net income rose to $250 million from $241.2 million [1][3] - Earnings per share increased to $3.78 from $3.61, driven by a positive impact from foreign currency exchange of $136.6 million [1][3] - For the first half of 2025, revenue increased by 1% to $15.3 billion, with net income rising 8% to $494.3 million [3][4] Retail Automotive Operations - Retail automotive same-store revenue decreased by 1%, with new vehicle sales down 2% and used vehicle sales down 1% [5][6] - Retail automotive gross profit increased by 3% to $1.1 billion, driven by a 9% increase in service and parts revenue [6][7] - Total new units delivered decreased by 6%, while used units delivered decreased by 16% [4][20] Retail Commercial Truck Dealerships - Retail commercial truck revenue increased by 6% to $943.6 million, with retail unit sales rising 2% [8][19] - For the first half of 2025, revenue from retail commercial trucks increased by 5% to $1.8 billion [8][19] Penske Transportation Solutions - Penske Transportation Solutions recorded earnings of $53.5 million for the second quarter, up from $52.9 million in the previous year [9] - The company operates a managed fleet of over 414,000 trucks, tractors, and trailers [9] Share Repurchase and Capital Allocation - The company repurchased 885,272 shares of common stock in the first half of 2025, representing approximately 1.3% of its outstanding shares [10] - As of June 30, 2025, the company had approximately $2.3 billion in liquidity, including $155 million in cash [10] Corporate Developments - The company completed the acquisition of a Ferrari dealership in Italy, expected to generate annualized revenue of $40 million [11] - The Board of Directors approved a 4.8% increase in the quarterly dividend to $1.32 per share, marking the 19th consecutive quarterly increase [11]

Group 1 - Penske Automotive Group, Inc. announced a quarterly dividend increase of 4.8% to $1.32 per share, marking the 19th consecutive quarterly increase [1][2] - The dividend is payable on September 3, 2025, to shareholders of record as of August 15, 2025 [1] - The increase reflects the company's strong balance sheet and cash flow, as stated by President Robert H. Kurnick, Jr. [2] Group 2 - Penske Automotive Group operates internationally, with dealerships in the United States, the United Kingdom, Canada, Germany, Italy, Japan, and Australia [2] - The company is one of the largest retailers of commercial trucks in North America and employs over 28,700 people worldwide [2] - Penske Automotive owns 28.9% of Penske Transportation Solutions, which manages a large trucking fleet and provides transportation and supply chain solutions [2]

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for Penske Automotive (PAG) despite higher revenues, with actual results being crucial for stock price movement [1][2]. Group 1: Earnings Expectations - Penske Automotive is expected to report quarterly earnings of $3.56 per share, reflecting a year-over-year decrease of 1.4% [3]. - Revenue projections stand at $7.87 billion, indicating a 2.2% increase from the previous year [3]. Group 2: Estimate Revisions - The consensus EPS estimate has been revised down by 0.78% over the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate for Penske is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +2.60% [12]. Group 3: Earnings Surprise Prediction - A positive Earnings ESP reading suggests a potential earnings beat, especially when combined with a strong Zacks Rank [10]. - Penske currently holds a Zacks Rank of 4, complicating predictions of an earnings beat despite the positive Earnings ESP [12]. Group 4: Historical Performance - In the last reported quarter, Penske exceeded the expected earnings of $3.27 per share, achieving $3.39, which was a surprise of +3.67% [13]. - Over the past four quarters, Penske has surpassed consensus EPS estimates three times [14]. Group 5: Industry Comparison - Lithia Motors (LAD), a competitor in the automotive retail sector, is projected to report earnings of $9.55 per share, reflecting a year-over-year increase of 21.4% [18]. - Lithia's revenue is expected to reach $9.53 billion, up 3.3% from the previous year, with a consensus EPS estimate revised down by 0.7% [19].

Industry Overview - The Zacks Auto Retail and Wholesale industry is experiencing significant changes due to evolving consumer habits, policy shifts, and strategic actions by key players [1][3] - The industry is consumer-driven, with performance closely tied to economic conditions, where increased disposable income typically leads to higher vehicle purchases [3] - The COVID-19 pandemic has accelerated the industry's shift towards online tools and e-commerce, a trend expected to continue [3] Factors Influencing Industry Dynamics - Car affordability has seen a modest improvement due to rising consumer incomes and dealer incentives, but tariffs on imported vehicles continue to pose challenges, potentially adding up to $5,700 to the cost of new cars [4] - The EV market is in a transitional phase, with first-half 2025 U.S. EV sales reaching 607,089 units, a 1.5% year-over-year increase, but a decline in demand is anticipated in the fourth quarter without government subsidies [5] - Auto retailers are making strategic acquisitions to enhance market share and diversify offerings, while also investing in digital platforms to meet changing customer expectations [2][6][7] Market Performance - The Zacks Auto Retail & Wholesale industry ranks 91, placing it in the top 37% of 245 Zacks industries, indicating positive near-term prospects [8][9] - Over the past year, the industry has outperformed the S&P 500, returning 16.3% compared to the S&P 500's 12.6% growth [10] Current Valuation - The industry is currently trading at an EV/EBITDA ratio of 8.95X, significantly lower than the S&P 500's 17.64X and the sector's 20.66X [13] Company Highlights - **Penske Automotive**: Completed acquisitions in 2024 representing nearly $2.1 billion in annualized revenues, with a strong order backlog and a low long-term debt-to-capitalization ratio of 15.5% [17][18] - **Lithia Motors**: Expanded its footprint through acquisitions, adding $3.8 billion in 2023 and $5.9 billion in 2024 in annualized revenues, with a focus on digital platforms to enhance customer experience [22][23] - **AutoNation**: Continues to grow through strategic acquisitions and digital transformation, with a recent purchase expected to add $200 million in annual revenues [25][26] - **Group 1 Automotive**: Achieved significant revenue growth through acquisitions, adding over $1 billion in 2023 and $3.9 billion in 2024, while focusing on an omnichannel strategy [31][32]