Penske, Rush see drop in finance, insurance revenue

Penske Automotive Group and Rush Enterprises saw declines in finance and insurance revenue in the third quarter, but increased sales in some categories were a silver lining. 

While the commercial trucking industry has shown recent signs of recovery, the dealers’ Q3 results highlight persistent challenges, including low freight rates, high interest rates and overcapacity. However, an uptick in homebuying and expectations of continued interest rate cuts by the Federal Reserve signal that brighter days are on the horizon. 

Penske  

Bloomfield Hills, Mich.-based Penske Automotive Group reported $5.2 million of finance and insurance revenue for commercial trucks in Q3, down 11.9% year over year, according to its Oct. 29 earnings statement. 

Penske’s parts and service revenue fell 1% YoY to $232.8 million. Total commercial truck revenue rose 12.3% YoY to $1.1 billion. 

The company sold 6,331 new and used trucks in Q3, up 13.9% YoY. New truck sales drove the increase, rising 15.7% YoY to 5,405. Looking ahead, Penske anticipates that Class 8 truck demand will be “driven primarily by replacement purchases,” North American Chief Operating Officer Rich Shearing said during the company’s Q3 earnings call. 

Meanwhile, the company had $4.2 million of floor plan notes payable through Q3, up 40% YoY. This was attributed to an increase in market day supply for new and used vehicles to 53 and 43, respectively, compared to 52 and 40 at the end of Q2, Penske Executive Vice President and Chief Financial Officer Shelley Hulgrave said during the earnings call. 

Shares of Penske Automotive Group (NYSE: PAG) were down .04% from market open to $150.51 as of market close today. The company has a market capitalization of $10.1 billion.   

Rush Enterprises 

San Antonio-based Rush Enterprises’ finance and insurance revenue totaled $5.8 million in Q3, down 7.9% YoY, according to its Oct. 29 earnings statement. Revenue from aftermarket parts and services declined 1.6% YoY to $633 million. Total revenue fell 4.2% YoY to $1.9 billion.  

The company sold 3,604 new Class 8 trucks in Q3, down 16.7% YoY. New Class 4 to Class 7 sales rose 4.2% YoY to 3,379. Economic uncertainty and continued low freight rates contributed to sluggish Class 8 sales, Chief Executive W.M. “Rusty” Rush stated in the company’s earnings report.  

“Although Class 8 demand remains weak in the over-the-road segment, our unique focus on specialty markets, including vocational and public sector, allowed us to achieve strong sales results to those customer segments, which we expect to continue in the fourth quarter,” Rush said. 

Through Q3, Rush Enterprises had $1.3 billion of floor plan notes payable, up 14% YoY. 

Shares of Rush Enterprises (NYSE: RUSHA) were up 1.6% from market open to $57.46 as of market close today. It has a market capitalization of $4.3 billion.