LKQ Corporation (LKQ - Free Report) reported adjusted diluted earnings of 75 cents per share in third-quarter 2020, surpassing the Zacks Consensus Estimate of 52 cents.
This remarkable outperformance was driven by the higher-than-anticipated revenues from the parts and services segment in North America and Europe. Revenues from the North American and European markets came in at $1,007 million and $1,479.2 million, respectively, beating the Zacks Consensus Estimate of $994 million and $1,408 million. Moreover, the bottom line comes in higher than the year-ago quarter’s profit of 61 cents per share, up 23% year on year.
This aftermarket auto parts distributor registered quarterly revenues of $3,047.7 million, topping the Zacks Consensus Estimate of $2,941 million. However, the top-line figure decreased 3.2% from the year-ago level of $3,147.7 million. Parts and services organic growth also declined 4.5% year over year.
Segment Highlights
For the September-end quarter, revenues from the North American segment totaled $1,007 million, down from the $1,145.4 million reported in the prior-year quarter. EBITDA from the segment came in at $204.9 million, increasing 23.2% year over year.
Revenues from the European segment summed $1,479.2 million for the reported quarter, up from the $1,446.4 million recorded in the prior-year quarter. EBITDA from the segment came in at $136.2 million, up 9.2% year over year.
For the July-September period, revenues and EBITDA from the Specialty segment came in at $399.6 million and $48.3 million, higher than the year-ago respective figure of $394.2 million and $45.5 million.
Financial Position
LKQ Corp. had cash and cash equivalents of $421.4 million as of Sep 30, 2020, down from the $523 million recorded as of Dec 31, 2019. Long-term debt (excluding current portion) amounted to $3,009.7 million as on Sep 30, 2020, down from the $3,715.4 million recorded as of Dec 31, 2019. In addition, as of Sep 30, 2020, LKQ Corp’s balance sheet reflected net debt of $2.7 billion, the lowest net debt level since the second quarter of 2017.
During the third quarter, the company generated net cash of $221.6 million from operations, plunging 32.2% from the year-ago period. It generated free cash flow of $188.9 million in the quarter, down 28% year over year.
The company has decided to recommence the share-repurchase program in fourth-quarter 2020.
Zacks Rank & Other Stocks to Consider
LKQ Corp currently flaunts a Zacks Rank #1 (Strong Buy). Shares of the company have depreciated 16.6%, year to date, while the industry declined 17.2%.
Some other top-ranked stocks in the auto sector are Lear Corporation (LEA - Free Report) , Autoliv Inc (ALV - Free Report) and LCI Industries (LCII - Free Report) , all of which sport a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
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LKQ Corporation (LKQ - Free Report) reported adjusted diluted earnings of 75 cents per share in third-quarter 2020, surpassing the Zacks Consensus Estimate of 52 cents.
This remarkable outperformance was driven by the higher-than-anticipated revenues from the parts and services segment in North America and Europe. Revenues from the North American and European markets came in at $1,007 million and $1,479.2 million, respectively, beating the Zacks Consensus Estimate of $994 million and $1,408 million. Moreover, the bottom line comes in higher than the year-ago quarter’s profit of 61 cents per share, up 23% year on year.
This aftermarket auto parts distributor registered quarterly revenues of $3,047.7 million, topping the Zacks Consensus Estimate of $2,941 million. However, the top-line figure decreased 3.2% from the year-ago level of $3,147.7 million. Parts and services organic growth also declined 4.5% year over year.
Segment Highlights
For the September-end quarter, revenues from the North American segment totaled $1,007 million, down from the $1,145.4 million reported in the prior-year quarter. EBITDA from the segment came in at $204.9 million, increasing 23.2% year over year.
Revenues from the European segment summed $1,479.2 million for the reported quarter, up from the $1,446.4 million recorded in the prior-year quarter. EBITDA from the segment came in at $136.2 million, up 9.2% year over year.
For the July-September period, revenues and EBITDA from the Specialty segment came in at $399.6 million and $48.3 million, higher than the year-ago respective figure of $394.2 million and $45.5 million.
Financial Position
LKQ Corp. had cash and cash equivalents of $421.4 million as of Sep 30, 2020, down from the $523 million recorded as of Dec 31, 2019. Long-term debt (excluding current portion) amounted to $3,009.7 million as on Sep 30, 2020, down from the $3,715.4 million recorded as of Dec 31, 2019. In addition, as of Sep 30, 2020, LKQ Corp’s balance sheet reflected net debt of $2.7 billion, the lowest net debt level since the second quarter of 2017.
During the third quarter, the company generated net cash of $221.6 million from operations, plunging 32.2% from the year-ago period. It generated free cash flow of $188.9 million in the quarter, down 28% year over year.
The company has decided to recommence the share-repurchase program in fourth-quarter 2020.
Zacks Rank & Other Stocks to Consider
LKQ Corp currently flaunts a Zacks Rank #1 (Strong Buy). Shares of the company have depreciated 16.6%, year to date, while the industry declined 17.2%.
Some other top-ranked stocks in the auto sector are Lear Corporation (LEA - Free Report) , Autoliv Inc (ALV - Free Report) and LCI Industries (LCII - Free Report) , all of which sport a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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