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LKQ Q2 Earnings Coming Up: What Should Investors Expect?
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LKQ Corporation (LKQ - Free Report) is slated to release second-quarter 2022 results on Jul 28, before market open. The Zacks Consensus Estimate for the quarter’s earnings and revenues is pegged at $1.02 per share and $3.39 billion, respectively.
The Zacks Consensus Estimate for LKQ’s second-quarter earnings per share has been revised downward by a penny in the past 30 days. The bottom-line projection implies a year-over-year decline of 9.7%. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year contraction of 1.4%.
This aftermarket auto parts distributor reported better-than-expected earnings in the last reported quarter on higher-than-anticipated revenues from the North American and European segments. The company topped earnings estimates in the preceding four quarters, with the average being 23.55%. This is depicted in the graph below:
Our proven model does not conclusively predict 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 -0.79%. This is because the Most Accurate Estimate is pegged 1 cent below the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The increase in the average age of vehicles (12.2 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. This is expected to have boosted LKQ’s revenues.
The Zacks Consensus Estimate for quarterly revenues from parts and services in the Specialty segment is $537 million, implying a rise from $531 million reported in the prior-year quarter. However, revenue estimates for LKQ’s North America and Europe units indicate a year-over-year decline. 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 $1,471 million, suggesting a decline from $1,570 million recorded in the prior-year quarter. The consensus estimate for revenues from parts and services in NorthAmerica for the June-end quarter is pegged at $975 million, indicating a drop from $1,077 million recorded in the prior-year period.
Additionally, rising manufacturing costs for the development of technically-enhanced components might have hurt the firm’s profit levels in the quarter under discussion. Congestions within the ports and at the rail hubs resulted in delays and increased costs for ocean and land freight in the last reported quarter, both in North America as well as Europe. These headwinds are anticipated to have continued in the second quarter as well, Inflationary headwinds related commodity costs are likely to have weighed on second-quarter margins.
Stocks With the Favorable Combination
Here are a few stocks in the auto sector lined up to release quarterly results soon. Encouragingly, our model predicts an earnings beat for these stocks:
Oshkosh Corporation (OSK - Free Report) has an Earnings ESP of +8.67% and a Zacks Rank #3. The stock is set to report second-quarter 2022 earnings on Jul 28.
The Zacks Consensus Estimate for Oshkosh’s to-be-reported quarter’s earnings and revenues is pegged at 93 cents per share and $2.2 billion, respectively. Over the trailing four quarters, OSK surpassed earnings estimates twice for as many misses, with the average negative surprise being 1.21%.
Magna International (MGA - Free Report) has an Earnings ESP of +5.82% and a Zacks Rank #3. The company is slated to release second-quarter results on Jul 29.
The Zacks Consensus Estimate for Magna’s to-be-reported quarter’s earnings and revenues is pegged at 95 cents per share and $8.77 billion, respectively. Over the trailing four quarters, MGA surpassed earnings estimates twice for as many misses, with the average being 12.6%.
Lear Corporation (LEA - Free Report) has an Earnings ESP of +6.93% and a Zacks Rank #3. The company is set to post second-quarter results on Aug 2.
The Zacks Consensus Estimate for Lear’s to-be-reported quarter’s earnings and revenues is pegged at $1.18 per share and $4.75 billion, respectively. LEA surpassed earnings estimates in three of the last four quarters and missed once, with the average being 6.53%.
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LKQ Q2 Earnings Coming Up: What Should Investors Expect?
LKQ Corporation (LKQ - Free Report) is slated to release second-quarter 2022 results on Jul 28, before market open. The Zacks Consensus Estimate for the quarter’s earnings and revenues is pegged at $1.02 per share and $3.39 billion, respectively.
The Zacks Consensus Estimate for LKQ’s second-quarter earnings per share has been revised downward by a penny in the past 30 days. The bottom-line projection implies a year-over-year decline of 9.7%. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year contraction of 1.4%.
This aftermarket auto parts distributor reported better-than-expected earnings in the last reported quarter on higher-than-anticipated revenues from the North American and European segments. The company topped earnings estimates in the preceding four quarters, with the average being 23.55%. This is depicted in the graph below:
LKQ Corporation Price and EPS Surprise
LKQ Corporation price-eps-surprise | LKQ Corporation Quote
Earnings Whispers
Our proven model does not conclusively predict 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 -0.79%. This is because the Most Accurate Estimate is pegged 1 cent below the Zacks Consensus Estimate. 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 (12.2 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. This is expected to have boosted LKQ’s revenues.
The Zacks Consensus Estimate for quarterly revenues from parts and services in the Specialty segment is $537 million, implying a rise from $531 million reported in the prior-year quarter. However, revenue estimates for LKQ’s North America and Europe units indicate a year-over-year decline. 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 $1,471 million, suggesting a decline from $1,570 million recorded in the prior-year quarter. The consensus estimate for revenues from parts and services in NorthAmerica for the June-end quarter is pegged at $975 million, indicating a drop from $1,077 million recorded in the prior-year period.
Additionally, rising manufacturing costs for the development of technically-enhanced components might have hurt the firm’s profit levels in the quarter under discussion. Congestions within the ports and at the rail hubs resulted in delays and increased costs for ocean and land freight in the last reported quarter, both in North America as well as Europe. These headwinds are anticipated to have continued in the second quarter as well, Inflationary headwinds related commodity costs are likely to have weighed on second-quarter margins.
Stocks With the Favorable Combination
Here are a few stocks in the auto sector lined up to release quarterly results soon. Encouragingly, our model predicts an earnings beat for these stocks:
Oshkosh Corporation (OSK - Free Report) has an Earnings ESP of +8.67% and a Zacks Rank #3. The stock is set to report second-quarter 2022 earnings on Jul 28.
The Zacks Consensus Estimate for Oshkosh’s to-be-reported quarter’s earnings and revenues is pegged at 93 cents per share and $2.2 billion, respectively. Over the trailing four quarters, OSK surpassed earnings estimates twice for as many misses, with the average negative surprise being 1.21%.
Magna International (MGA - Free Report) has an Earnings ESP of +5.82% and a Zacks Rank #3. The company is slated to release second-quarter results on Jul 29.
The Zacks Consensus Estimate for Magna’s to-be-reported quarter’s earnings and revenues is pegged at 95 cents per share and $8.77 billion, respectively. Over the trailing four quarters, MGA surpassed earnings estimates twice for as many misses, with the average being 12.6%.
Lear Corporation (LEA - Free Report) has an Earnings ESP of +6.93% and a Zacks Rank #3. The company is set to post second-quarter results on Aug 2.
The Zacks Consensus Estimate for Lear’s to-be-reported quarter’s earnings and revenues is pegged at $1.18 per share and $4.75 billion, respectively. LEA surpassed earnings estimates in three of the last four quarters and missed once, with the average being 6.53%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.