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Penske Automotive Group Earnings Preview

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Penske Automotive Group (NYSE: PAG) announces its next round of earnings this Thursday, October 22. Here is Benzinga's everything-that-matters guide for this Thursday's Q3 earnings announcement.

Net Income, Earnings, And Earnings Per Share

Earnings and earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equates to net income divided by the number of shares outstanding.

Earnings And Revenue

Based on management's projections, Penske Automotive Group analysts model for earnings of $1.56 per share on sales of $5.50 billion. Penske Automotive Group reported a per-share profit of $1.42 when it published results during the same quarter last year. Sales in that period totaled $5.97 billion.

Why Analyst Estimates And Earnings Surprises Are Important

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

The Wall Street estimate would represent a 9.86% increase in the company's earnings. Sales would have fallen 7.84% from the same quarter last year. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019
EPS Estimate 0.54 0.75 1.22 1.41
EPS Actual 0.56 0.64 1.25 1.42
Revenue Estimate 4.06 B 5.30 B 5.75 B 5.85 B
Revenue Actual 3.65 B 5.01 B 5.88 B 5.97 B

Stock Performance

Shares of Penske Automotive Group were trading at $56.06 as of October 20. Over the last 52-week period, shares are up 17.89%. Given that these returns are generally positive, long-term shareholders can be satisfied going into this earnings release.

 

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