Penske Automotive Group, Inc ( PAG ). reported first-quarter earnings per share of $3.21, missing the street view of $3.31.

Quarterly sales of $7.448 billion missed the analyst consensus of $7.465 billion.

For the quarter, revenue increased 1.5% year over year.

The company’s quarterly results were negatively impacted by higher interest costs of $17.4 million, driven primarily by an increase in interest rates and higher inventory levels which increased borrowings under floorplan arrangements combined with lower equity earnings from the company’s investment in Penske Transportation Solutions.

Penske Automotive ( PAG ) CEO Roger Penske said, “Our retail automotive service and parts revenue grew 9% to a quarterly record of $746 million.”

During the quarter, the company “experienced a recovery across our used vehicle retail automotive operations with profitability improving sequentially by $428 per unit retailed,” Penske said.

For the three months ended March 31, total new and used units delivered increased 4% to 126,864, and total retail automotive revenue increased 3% to $6.5 billion. 

Same-store new and used units delivered increased by 1% to 122,060, and same-store revenue decreased by 1%. 

“Further, I was pleased with our focus on controlling costs as selling, general, and administrative expenses as a percentage of gross profit improved by 30 basis points sequentially to 70.7%, the CEO added.

Same-store service and parts revenue and gross profit increased 5%.

As of March 31, Premier Truck Group operated 43 North American retail commercial truck locations.

Price Action: PAG shares are trading lower by 1.46% to $153.17 at the last check Tuesday.

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