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LKQ Corp (LKQ) Beats on Q2 Earnings & Sales, Ups '21 Outlook

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LKQ Corporation (LKQ - Free Report) reported adjusted earnings of $1.13 per share in second-quarter 2021, surpassing the Zacks Consensus Estimate of 74 cents. This outperformance was driven by the higher-than-anticipated contribution from all of the company’s segments.

Moreover, the bottom line comes in higher than the year-ago quarter’s profit of 53 cents per share, up a whopping 113.2% year on year.

This aftermarket auto parts distributor registered quarterly revenues of $3,435.1 million, topping the Zacks Consensus Estimate of $3,081 million. In addition, the top-line figure climbed 30.8% from the year-ago level of $2,626.3 million. Parts and services organic revenue also increased 21.9% year over year.

LKQ Corporation Price, Consensus and EPS Surprise

LKQ Corporation Price, Consensus and EPS Surprise

LKQ Corporation price-consensus-eps-surprise-chart | LKQ Corporation Quote

Segment Highlights

For the June-end quarter, revenues from the North American segment totaled $1,327.7 million, up from the $1,011.4 million reported in the prior-year period. Also, EBITDA from the segment came in at $276.2 million, significantly up 84.7% year over year. The reported EBITDA figure also outpaced the Zacks Consensus Estimate of $181 million.

Revenues from the European segment summed $1,576.7 million for the reported quarter, up from the $1,211.2 million recorded in the year-earlier quarter. The segment’s EBITDA came in at $168.1 million, surging 88.2% year over year. The reported EBITDA figure also beat the consensus mark of $128 million.

For the April-June period, revenues and EBITDA from the Specialty segment came in at $532.3 million and $79.4 million, higher than the year-ago figure of $404.9 million and $52.2 million, respectively. The reported EBITDA surpassed the consensus mark of $65 million.

Financial Position

LKQ Corp had cash and cash equivalents of $328.7 million as of Jun 30, 2021, up from the $312.2 million recorded as of Dec 31, 2020. Long-term debt (excluding current portion) amounted to $2,360.7 million as on Jun 30, 2021, down from the $2,812.6 million recorded as of Dec 31, 2020. In addition, as of Jun 30, 2021, LKQ Corp’s balance sheet reflects net debt of $2.1 billion.

During the second quarter, the company generated net cash of $411 million from operations, plunging 42.9% from the year-ago period. It generated free cash flow of $364.5 million, down 46.8% year over year. During the reported quarter, the company repurchased 6.2 million shares of its common stock. Since the inception of its repurchase program, the company has repurchased 25 million shares for a total of $830 million.

2021 Guidance

For 2021, the company projects diluted EPS in the range of $3.23-$3.43 per share and adjusted diluted EPS of $3.55-$3.75 per share, up from the previous estimate of 2.68-$2.88 per share and $3-$3.2 per share, respectively.

The company envisions generating free cash flow in the range of $950-$1,050 million, up from the earlier forecast of $850-$950 million.

Zacks Rank & Stocks to Consider

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

Better-ranked stocks in the auto sector include Harley-Davidson (HOG - Free Report) , General Motors (GM - Free Report) and BRP Inc. (DOOO - Free Report) , all of which sport a Zacks Rank of 1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.


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