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LKQ Q3 Earnings Drive Past Estimates, Revenues Grow Y/Y

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LKQ Corporation’s (LKQ - Free Report) third-quarter 2017 adjusted earnings from continuing operations came in at 45 cents per share, surpassing the Zacks Consensus Estimate of 42 cents. The bottom line is however, in line with the prior-year quarter figure.

In the third quarter, total revenue rose 11.7% to $2.47 billion from $2.21 billion a year ago and also outpaced the Zacks Consensus Estimate of $2.37 billion. A strong performance across all segments resulted in positive revenue growth for LKQ Corp.

Business Developments

In third-quarter 2017, LKQ Corp acquired 11 companies, including two in the United States and nine in Europe. These acquisitions will complement the company’s existing business line.

Also, during the quarter, European operations of LKQ Corp opened up two new branches in the United Kingdom and four new in the Eastern Europe.

LKQ Corporation Price, Consensus and EPS Surprise

Financial Position

LKQ Corp had cash and cash equivalents of $275.1 million as of Sep 30, 2017 compared with $227.4 million as of Dec 31, 2016.

In the first nine months of 2017, LKQ Corp had net cash provided by operating activities of $449.2 million compared with $524.2 million in the first nine months of 2016.

2017 Outlook

For 2017, LKQ Corp expects organic revenue growth for parts & services in the range of 4-4.5%, revised from the prior guidance of 4-4.25%.

Adjusted income from continuing operations is expected to be within the range of $575-$595 million, up from the prior expectation of $570-$595 million. Adjusted earnings per share in 2017 are expected to be in the band of $1.86-$1.92, up from the former projection of $1.84-$1.92.

Zacks Rank & Key Picks

LKQ Corp currently carries a Zacks Rank #3 (Hold).

Some better-ranked companies in the auto space are Autoliv, Inc. (ALV - Free Report) , BorgWarner Inc. (BWA - Free Report) and Cummins Inc. (CMI - Free Report) , all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Autoliv has an expected long-term growth rate of 8.7%.

BorgWarner has an expected long-term growth rate of 8.9%.

Cummins has an expected long-term growth rate of 12%.

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