US: Penske shares surge as profit beats estimates

Detroit Free Press -Penske Automotive Group rose the most in almost two years in New York trading after first-quarter profit beat analysts' estimates because of increased vehicle sales and a lower tax rate.

Penske climbed $2.52, or 12% to $23.06. The Bloomfield Hills-based company's shares are at their highest closing price since February 2007.

Net income climbed 67% to $33.9 million from $20.4 million a year earlier, Penske said Thursday in a statement. Excluding some items, profit was 39 cents a share, exceeding the 30-cent average estimate of nine analysts in a Bloomberg survey. Sales rose 15% to $2.86 billion.

The tax rate for Penske, the second-largest U.S. automotive retailer, fell to 30.1% in the quarter from 37.3% a year earlier, Anthony Pordon, a spokesman, said in an e-mail. Retail new-vehicle deliveries rose 11% to 40,030 units.

"Our first-quarter results exceeded my expectations," CEO Roger Penske said in the statement.

Last month's earthquake in Japan will affect the availability of new vehicles later this year, he said in the statement. Japanese manufacturers such as Toyota and Honda accounted for more than 34% of total revenues last year, according to a regulatory filing.

Penske said in February it would end a distribution agreement with Daimler's Smart brand after sales of its fuel-efficient Fortwo small car plunged.

Penske reiterated that it expects Daimler to take over the Smart distribution business by the end of the second quarter.

Penske had a loss of $15.9 million, or 17 cents a share, on the Smart business last year. A portion of the lower first-quarter tax rate was a result of net operating loss deductions related to the Smart unit, Pordon said.

Smart deliveries fell to 5,927 last year, a 76% drop from 2008, when the brand debuted in the U.S.

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