* Q3 adjusted EPS $0.34: Street view $0.28
* Revenue down 13 pct to $2.6 bln
* Cost-cutting, Cash for Clunkers boost earnings
DETROIT, Oct 30 Penske Automotive Group
(PAG.N), the No. 2 U.S car dealership group by sales, reported
a 23 percent increase in quarterly earnings Friday on
cost-cutting and a boost from the U.S. government's "Cash for
Net income rose to $27.4 million, or 30 cents per share,
from $22.2 million, or 24 cents per share, a year earlier.
Excluding one-time items, such as charges related to its
late-September decision to scrap a plan to acquire the Saturn
brand from General Motors Co [GM.UL], Penske posted adjusted
earnings of 34 cents per share. Analysts, on average, had
forecast 28 cents per share, according to Thomson Reuters
Revenue fell 13 percent to $2.6 billion, in line with
Other major U.S. auto dealerships also reported higher
earnings this week after slashing inventories and staff as U.S.
auto sales slumped to the lowest level since the early 1980s.
AutoNation Inc.(AN.N), Asbury Automotive (ABG.N) and Sonic
Automotive (SAH.N), three of the other top auto retailers, said
they expected that the worst of the industry's downturn had
passed although the recovery would be slow.
Penske had been expected to take control of GM's Saturn
brand. That deal collapsed at the end of September when Renault
SA (RENA.PA) rejected a deal to supply Saturn-branded vehicles
for Penske to sell through the U.S. dealership network.
Bloomfield Hills, Michigan-based Penske took a
third-quarter charge of $1.9 million related to the failed
It said that its Smart minicar unit expected to sell 15,700
vehicles this year. Smart, a joint venture between Penske and
Daimler AG (DAIGn.DE), has seen sales drop 32 percent so far
this year, a sharper decline than the overall market.
Smart had earlier targeted flat sales in 2009.
Penske operates 310 auto franchises in the United States
and Britain. Sales of BMW, Toyota Motor Corp (7203.T) and Honda
Motor Co (7267.T) branded vehicles account for over half of its
overall new car sales.
Like other listed dealership groups, Penske shares have
slipped this week on expectations that the recovery in the U.S.
auto market will remain grudging.
The shares closed Thursday at $16.99 and have lost 6
percent this week. The shares peaked in early August amid the
short-lived auto sales boom prompted by the Cash for Clunkers
program. Since then they are down nearly 20 percent.
(Reporting by Kevin Krolicki, editing by John Wallace and