SUNNY ISLES, Fla. — Icahn Enterprises L.L.C.'s automotive business unit generated pre-tax operating income of $32 million in the quarter ended Sept. 30 despite a 29% drop in revenue.
Icahn Automotive Group — which does business in the automotive aftermarket under the Pep Boys brand — did not elaborate on the reasons for the earnings improvement. A year ago Icahn Automotive reported operating earnings or $1 million.
The unit registered net income of $7 million versus a net loss of $21 million a year ago.
As for revenue, Icahn noted that automotive services sales were down $4 million due to the closure of unprofitable locations and a reduced car count in the remaining outlets.
For the nine months ended Sept. 30, Icahn Automotive reported a seven-fold increase in operating income to $85 million on 26.7% lower revenue of $1.33 billion. The net result was a $2 million loss, nonetheless an improvement from a $64 million loss a year ago.
Pep Boys store network stood at 891 locations throughout the U.S. and Puerto Rico in mid-October, down 31 stores from a year earlier. The company has not commented publicly on its reasons for closing the stores nor disclosed which stores closed.
At the same time, Pep Boys opened a handful of greenfield locations in recent months, including stores in Brownsburg, Ind., Raleigh, N.C. and Chalmette, La.
The bulk of the revenue decline was attributed to a drop of $178 million in aftermarket parts sales, primarily driven by the deconsolidation of AutoPlus on January 31.
With 891 locations, Icahn Automotive/Pep Boys is considered the No. 4 retail tire and auto service dealership in the U.S., according to Tire Business research.
The business also is the franchisor of the AAMCO Total Car Care and Precision Tune Auto Care brands.