Penske Automotive Group Reports Strong First Quarter 2025 Results
Penske Automotive Group (PAG) recently reported its financial results for the first quarter of 2025, showcasing a remarkable performance across various business segments. According to Roger Penske, Chair and CEO, the company's diversified international transportation service business generated record revenue in Q1, achieving a seventh consecutive quarter of stable gross margin.
In terms of numbers, PAG reported a 2% increase in revenue to a record $7.6 billion, with same-store retail automotive revenue also rising by 2%. Related gross profit was up 3%, while same-store retail automotive service and parts revenue increased by 4%, with related gross profit increasing by 6%. The company's service and parts business saw a significant improvement in gross margin, up 60 basis points to 58.6%.
The financial results were impressive, with PAG generating $337 million in earnings before taxes, $244 million in net income, and earnings per share of $3.66 each, representing a 14% increase over the same period last year. On an adjusted basis, earnings before taxes increased by 5% to $310 million, while net income rose by 5% to $226 million. Earnings per share also grew by 6% to $3.39.
Roger Penske highlighted the current fluid environment in the automotive and commercial truck markets, citing the administration's efforts to encourage companies to discuss their plans. He emphasized that PAG remains in close contact with its OEM partners and believes most brands are evaluating the company's individual geographic footprint, including production capacity, model mix, suppliers, vehicle content, and other factors.
As the company looks to the future, Penske emphasized the importance of diversification as a key differentiator. With revenue generated across multiple sources, such as new, used, service, parts, and finance and insurance, PAG's profitability is also diversified. In fact, only 26% of its total gross profit in 2024 came from new vehicle sales.
During the quarter, PAG delivered a significant number of vehicles, with 120,000 new and used automotive units and over 4,700 commercial trucks being sold or delivered. The company's ability to adapt to changing market conditions and capitalize on opportunities will be crucial in maintaining its position as a leading player in the industry.
