Penske Automotive Group Wednesday announced record third quarter and nine months 2021 results, including the best quarterly results in company history.
For the three months ended September 30, 2021, the company reported a 43.9 percent increase in income from continuing operations attributable to common shareholders to $354.8 million and a 45.3 percent increase in related earnings per share to $4.46. This compares to income from continuing operations attributable to common shareholders of $246.5 million, or $3.07 per share, in the prior year. Foreign exchange positively impacted earnings per share by $0.06.
"Our business produced an all-time record third quarter driven by strength across all areas of our business, including continued strong vehicle margins, improving service and parts operations, a growing Class 8 commercial truck market, record performance at Penske Transportation Solutions, and continuing cost controls, which contributed to a 230 basis point improvement in selling, general, and administrative expenses as a percentage of gross profit," says Roger Penske, chairman and CEO. "During the quarter, we reduced long-term non-vehicle debt by $245.4 million to $1.4 billion, improved our leverage ratio to 0.9 to 1 on a trailing twelve-month basis, and reduced debt to total capitalization to 27 percent.
He adds, "Since the end of 2019, we have reduced non-vehicle long-term debt by more than $900 million. Despite the ongoing supply-chain challenges which continue to impact the availability of new vehicles in both the automotive and commercial truck markets, our performance in the quarter demonstrates the strength of the automotive and commercial truck retail models and the benefits from our diversification."
For the nine months ended Sept. 30, 2021, the company reported a 155.3 percent increase in income from continuing operations attributable to common shareholders to $876.1 million and a 155.5 percent increase in related earnings per share to $10.91. This compares to income from continuing operations attributable to common shareholders of $343.1 million, or $4.27 per share, in the prior year, the company says.
Within its commercial truck space, the company reported for the three months ended Sept. 30, 2021, earnings before taxes increased 106.4 percent to $48.3 million compared to $23.4 million in the same period last year, return on sales was 6.7 percent, and fixed cost absorption was 129.9 percent. The increase in earnings before taxes was principally driven by a 57.7 percent increase in gross profit, including a 39.9 percent increase in same-store gross profit. For the nine months ended September 30, 2021, earnings before taxes increased 123.4 percent to $115.5 million compared to $51.7 million in the same period last year and return on sales was 6.5 percent.