Back to top

Image: Bigstock

Important Predictions Ahead of LKQ's Q1 Earnings Release

Read MoreHide Full Article

LKQ Corporation (LKQ - Free Report) is slated to release first-quarter 2022 results on Apr 28, before market open. The Zacks Consensus Estimate for the quarter’s earnings and revenues is pegged at 91 cents per share and $3.28 billion, respectively.

This aftermarket auto parts distributor reported better-than-expected earnings in the last reported quarter on higher-than-anticipated revenues from the North American, European and Specialty segments. The company topped earnings estimates in the preceding four quarters, with the average being 33.4%. This is depicted in the graph below:

LKQ Corporation Price and EPS Surprise

LKQ Corporation Price and EPS Surprise

LKQ Corporation price-eps-surprise | LKQ Corporation Quote

Trend in Estimate Revisions

The Zacks Consensus Estimate for LKQ’s first-quarter earnings per share has been unchanged in the past 30 days. The bottom-line projection implies a year-over-year decline of 3.2%. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year increase of 3.4%.

Earnings Whispers

Our proven model predicts an earnings beat for LKQ this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.

Earnings ESP: LKQ has an Earnings ESP of +0.37%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: LKQ currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors to Note

The increase in the average age of vehicles (12.1 years according to IHS Markit data) is likely to have positively impacted sales of LKQ’s products. For the smooth functioning of the aging vehicles, customers have been spending heavily to replace any faulty parts and components. Consequently, the demand for replacement parts, components, and systems is likely to have picked up and boosted LKQ’s first-quarter revenues.

On the flip side, rising manufacturing costs for the development of technically-enhanced components might have hurt the firm’s profit levels in the quarter under discussion. Inflationary headwinds related to labor, freight and commodity costs are likely to have weighed on first-quarter margins.

Here’s a sneak peek into LKQ’s revenue and EBITDA estimates across segments.

The Zacks Consensus Estimate for quarterly revenues from parts and services in Europe — which has the highest contribution to the company’s revenues — is pegged at $1,480 million, suggesting a rise from the $1,455 million recorded in the prior-year quarter. Further, the consensus mark for the segment’s quarterly EBITDA is pegged at $145 million, indicating a nominal uptick from $141 million recorded in the comparable year-ago period.

The consensus estimate for revenues from parts and services in North America for the December-end quarter is pegged at $1,088 million, indicating a rise from the $1,018 million recorded in the prior-year period. Yet, the consensus mark for the segment’s quarterly EBITDA is pegged at $215 million, which indicates a decline from the $249 recorded in the prior-year quarter.

The Zacks Consensus Estimate for quarterly revenues from parts and services in the Specialty segment is $475 million, calling for a rise from the $458 million reported in the prior-year quarter. The consensus mark for the segment’s quarterly EBITDA is pegged at $60 million, indicating a slight drop from $61 million recorded in the prior-year quarter.

Peer Releases

Genuine Parts Company (GPC - Free Report) reported first-quarter 2022 adjusted earnings of $1.86 per share, up 24% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $1.70 per share. The company reported net sales of $5,294.6 million, surpassing the Zacks Consensus Estimate of $5,131 million and higher than $4,465 million recorded in the year-ago period. The upside resulted from 12.3% growth in comparable sales and 8.1% benefit from acquisitions, partly offset by an unfavorable impact of foreign currency translation.

Genuine Parts had cash and cash equivalents worth $610.7 million as of Mar 31, 2022. Long-term debt increased to $3,387.8 million from $2,458 million recorded as of Mar 31, 2021. The company generated a free cash flow of $320.7 million in 2021. GPC projects revenues from automotive and industrial sales to witness a year-over-year uptick of 5-7% and 21-23%, respectively. Full-year adjusted earnings per share are envisioned in the band of $7.70-$7.85, higher than the previous forecast of $7.45-$7.60.

Dorman Products (DORM - Free Report) reported first-quarter 2022 adjusted earnings of $1.29 per share, up 24% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $1.23 per share. The company reported net sales of $401.6 million, surpassing the Zacks Consensus Estimate of $373.7 million. The top line also grew 39% on a year-over-year basis.  

Dorman Products Parts had cash and cash equivalents worth $53.4 million as of Mar 31, 2022. Long-term operating lease liabilities increased to $88.8 million from $52.4 million recorded as of Dec 25, 2021. DORM expects fiscal 2022 net sales in the band of $1,600-$1,640 million, implying year-over-year growth of 19-21%.  Adjusted EPS is anticipated within $5.35-$5.55 a share, suggesting a yeary growth of 15-20%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Genuine Parts Company (GPC) - free report >>

LKQ Corporation (LKQ) - free report >>

Dorman Products, Inc. (DORM) - free report >>