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Penske Automotive announces surprise profit expectations

Yahoo Finance’s Brian Sozzi, Alexis Christoforous, and Ines Ferre break down the market action for Penske Automotive.

Video Transcript

BRIAN SOZZI: We're keeping our eyes on shares of Penske Auto, the company preannounced expectations for a surprise quarterly profit. Ines Ferre is back at the details, a new name for us, Ines, Penske, not a name we normally talk about here.

INES FERRE: That's right, but coming out with some good preliminary what they expect to be results based on its retail dealerships in the US also the UK and also based on what they call expense management. So the company is now expecting to report earnings in the range of anywhere between $0.52 and $0.57 a share. And Wall Street is really liking this. The stock right now is up more than 3%.

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CEO Roger Penske said that he's encouraged by the significant improvement during the month of June. June's performance is a result of a strong operational focus to control costs, manage vehicle inventory, and maximize gross profit. All US dealerships are now open. New and used unit sales improved sequentially, according to the company, from May going into June.

And you can take a look at the three-months chart. The stock is up 55% over the last three months. Now, the company highlighted its liquidity position of nearly $1.2 billion. Also in May the company announced it was suspending its cash dividend. For now, that suspension will continue. But these final results are due to come out on July 29. So far, from what we've heard of the company so far, Wall Street really liking this preliminary data.