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Letter to the Editor
Tuesday April 18
UnitedAuto Group Reports Revenues Up in Q1
United Auto Group, Inc., the international automotive retailer, has reported first quarter income from continuing operations of $26.2 million and related earnings per share of $0.56, representing increases of 10.2 percent and 9.8 percent, respectively, over the comparable period in 2005. First quarter 2006 net income amounted to $24.1 million and related earnings per share was $0.51.UAG Chairman Roger Penske said, "While the first quarter was challenging from a retail sales perspective, our performance highlights the strength of our premium brand mix and the increasing benefit of our investment in service and parts capacity. During the quarter, revenues increased 11.6 percent to $2.7 billion, including a 4.2 percent increase in same-store retail revenues. The increase in same-store revenue was highlighted by a 15.8 percent increase in total vehicle revenues at the company's premium brand dealerships in the United States and an 8.2 percent increase in service and parts revenues."
Gross margin increased 29 basis points to 15.6 percent. The improvement in gross margin was due primarily to an increase in service and parts revenues to 11.6 percent of total revenues, coupled with an 85 basis-point increase in margin on service and parts revenues.
UAG anticipates a challenging and competitive automotive retail market for the balance of 2006, due in part to the impact on consumers of continuing increases in interest rates and rising energy costs. The company currently projects earnings from continuing operations in the second quarter in the range of $0.75 to $0.78 per share, and continues to project earnings from continuing operations for the year in the range of $2.70 to $2.80 per share. Earnings per share projections are based on an average of 47.0 million estimated shares outstanding.
United Auto Group, Inc., headquartered in Bloomfield Hills, Michigan, operates 294 retail automotive franchises, representing 40 different brands, and 27 collision repair centers.
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