LKQ Corporation’s (NASDAQ:LKQ) first-quarter 2017 adjusted earnings from continuing operations of 49 cents per share beat the Zacks Consensus Estimate of 46 cents and increased from 42 cents earned in the prior-year quarter.
Earnings from continuing operations, on a reported basis, amounted to $140.8 million or 45 cents per share, compared with $112.2 million or 36 cents in the prior-year quarter. Gross profit increased to $930.1 million from $760.4 million in the first quarter of 2016.
Total revenue also rose to a first quarter record of $2.34 billion from $1.92 billion a year ago and surpassed the Zacks Consensus Estimate of $2.31 billion.
Business Developments
In first-quarter 2017, LKQ Corp finalized the divestiture of the Pittsburgh Glass Works’ automotive glass manufacturing business.
LKQ Corp also acquired two parts-recycling businesses, one each in Michigan and Sweden, as well as a specialty products business in Pennsylvania during the quarter. The company’s Rhiag operations opened 12 new operations in Eastern Europe.
LKQ Corporation Price, Consensus and EPS Surprise
LKQ Corporation Price, Consensus and EPS Surprise | LKQ Corporation Quote
Financial Position
LKQ Corp had cash balance of $264.6 million as of Mar 31, 2017, compared with $227.4 million as of Dec 31, 2016. Long-term debt was $3.85 billion as of Mar 31, 2017, compared with $3.94 billion as of Dec 31, 2016.
In first-quarter 2017, LKQ Corp had cash flow of $172.3 million from operating activities, compared with $134.8 million in the prior-year period.
2017 Outlook
For 2017, LKQ Corp continues to expect organic revenue growth for parts and services in the range of 4–6%. Adjusted income from continuing operations is expected between $565−$595 million, from the prior expectation of $560−$590 million.
Earnings per share in 2017 are expected to be in the range of $1.82–$1.92, up from the prior expectation of $1.80–$1.90.
Cash flow from operations is expected in the range of $615−$645 million, up from the previous guidance of $610−$640 million. The company expects capital expenditures in the range of $200−$225 million.
Price Performance
The LKQ Corp stock has underperformed the Zacks categorized Automotive - Replacement Parts industry in the last three months. Share price of the stock decreased 4% over this period, while the industry saw a 1.2% decline.
Zacks Rank and Top Picks
LKQ Corp currently carries a Zacks Rank #4 (Sell).
Better-ranked companies in the auto space include Oshkosh Corp. (NYSE:OSK) , Fox Factory Holding Corp. (NASDAQ:FOXF) and Lear Corp. (NYSE:LEA) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Oshkosh has an expected long-term growth rate of 10.6%.
Fox Factory has an expected long-term growth rate of around 16.1%.
The expected long-term growth rate for Lear is pegged at 8.9%.
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LKQ Corporation (LKQ): Free Stock Analysis Report
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