Penske Loss Is First in 10 Years

Penske's automotive empire is crumbling under the economic downturn

Penske Automotive Group Inc. posted its first quarterly loss in 10 years, missing analysts’ expectations for a profit, and more than doubled its planned job cuts as new-car sales tumbled. Most of the fourth-quarter net loss of $509.9 million, or $5.61 a share, came from expenses to write down the value of assets, Penske said today. Without those costs, the loss was $2 million, or 2 cents a share, compared with the average estimate of earnings of 4 cents among 9 analysts surveyed by Bloomberg.

A 37 percent plunge in new-vehicle sales at the second- largest publicly traded U.S. car retailer highlighted crumbling demand in its home market and in the U.K. Recessions in both countries eroded gains from diversifying outside the U.S.

“The trends were all negative," said Rex Henderson, an analyst at Raymond James & Associates Inc. in St. Petersburg, Florida.

New-car sales were in line with low expectations, and revenue from used cars, truck leasing and dealerships open more than a year all trailed expectations, Henderson said. He rates Bloomfield Hills, Michigan-based Penske as “underperform."

Penske fell 95 cents, or 13 percent, to $6.31 at 10:25 a.m. in New York Stock Exchange composite trading. The shares tumbled 60 percent in the 12 months before today. Bloomberg