Penske Automotive Group reported a quarterly profit that has almost doubled. The dividend of the second largest dealership group in the U.S. was increased by 12.5%. In a statement, Penske revealed that it had a net income of $55.7 million, or 62 cents per share. This is higher than about $30 million, or 38 cents per share the previous year. Its adjusted income, excluding a one-time income tax benefit, amounted to $45.7 million or 50 cents per share.
Its revenue increased by 10.5% to $3 billion, boosted by an improvement in used car sales and elevated prices for both new and used cars and trucks.
Its new car prices climbed by 8.4% to an average of $38,236. Meanwhile, used car prices increased by 2.2% to $26,404. Its profit margins increased on the new and used car sales. Penske gave a separate statement, revealing that its board supported a 12.5% boost in the dividend to 9 cents per share.
In a statement, President Rob Kurnick said that the dividend increase signifies "the confidence” it has in the recovering auto sales environment. In addition, Penske purchased over 2.4 million shares from January to September in 2011. The high-end luxury brands, such as BMW, made up 70% of Penske's new vehicle revenue in the past quarter. About 25% of sales came from Toyota Motor Corp., Honda Motor Co. and other overseas mass-market brands.