Why Is Penske (PAG) Down 1% Since Last Earnings Report?

Core Viewpoint - Penske Automotive reported a mixed performance in its Q2 2024 earnings, with adjusted earnings per share beating expectations but showing a year-over-year decline, raising questions about future performance trends [2][10]. Financial Performance - Adjusted earnings for Q2 2024 were $3.61 per share, down 18% year-over-year, but above the Zacks Consensus Estimate of $3.43 [2]. - Net sales reached $7.69 billion, exceeding the Zacks Consensus Estimate by 0.02%, and reflecting a 3.1% increase from the previous year [2]. - Gross profit decreased by 0.7% year-over-year to $1.26 billion, while operating income fell 11.2% to $338 million [3]. Segment Performance - Retail Automotive segment revenues were $6.61 billion, up 3% year-over-year, with same-store retail units declining 1% to 120,486 [4][5]. - Same-store new-vehicle revenues increased by 1.9% to $2.87 billion, while same-store used-vehicle revenues decreased by 5.6% to $2.15 billion [4]. - The Commercial Vehicle Distribution and Other segment saw revenues rise 32% to $189 million, with gross profit increasing to $44.6 million [7]. Cost and Debt Management - SG&A costs totaled $887.5 million, up 3.4% year-over-year [8]. - Cash and cash equivalents increased to $115 million from $96.4 million at the end of 2023, while long-term debt rose to $1.59 billion from $1.42 billion [8]. Shareholder Returns - The company increased its dividend by 11% to $1.07 per share, marking the 15th consecutive quarterly increase [9]. Market Sentiment and Outlook - There has been an upward trend in estimates revisions for Penske, indicating a potentially positive outlook [10][12]. - The stock currently holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [12].