LKQ Corporation ( LKQ Quick Quote LKQ - Free Report) reported adjusted earnings of $1.04 per share in first-quarter 2023, outpacing the Zacks Consensus Estimate of 96 cents. The outperformance was due to better-than-expected revenues from Wholesale North American, European and Self-Service segments. The bottom line also improved by 4% year over year. The aftermarket auto parts distributor registered quarterly revenues of $3,349 million, surpassing the Zacks Consensus Estimate of $3,262 million. The top line remained unchanged from the year-ago level. Meanwhile, parts and services organic revenues increased 7.9% year over year. Segment Highlights
In the reported quarter, revenues from the Wholesale North American segment totaled $1,229 million, rising 2.3% from $1,201 million reported in the prior-year period and topping the consensus mark of $1,203 million. The segment’s EBITDA was $252 million, up from $218 million in the first quarter of 2022.
Revenues from the European segment were $1,555 million, up 4.5% from $1,488 million in the year-earlier quarter, beating the consensus mark of $1,435 million. The segment’s EBITDA came in at $151 million, up from $131 million in the year-ago period. Revenues from the Specialty segment came in at $397 million, down 13.9% year over year and missing the consensus mark of $456 million. The segment’s EBITDA was $31 million, down from the year-ago figure of $58 million. Revenues from the Self-Service segment totaled $169 million, down nearly 15.1% from the year-earlier quarter’s sales but surpassing the consensus mark of $162 million. The segment’s EBITDA was $22 million, declining from $40 million. Financial Position & Dividend
LKQ had cash and cash equivalents of $342 million on Mar 31, 2023, up from $278 million recorded as of Dec 31, 2022. The long-term debt (excluding the current portion) amounted to $1,111 million as of Mar 31, 2023, up from $1,091 million recorded on Dec 31, 2022. As of Mar 31, 2023, LKQ’s balance sheet reflected a net debt of $2.7 billion.
During the quarter, cash flow provided by operating activities totaled $223 million. The company recorded a positive free cash flow of $153 million. During the reported quarter, the company repurchased 0.1 million shares worth $5 million. Between the period of initiating the stock buyback program in late October 2018 and March 2023, it repurchased around 55 million shares for a total of $2.4 billion. On Apr 25, 2023, LKQ declared a quarterly cash dividend of 27.5 cents per share of common stock. The dividend is payable on Jun 1, 2023, to stockholders of record at the close of business on May 18, 2023. Unaltered 2023 Guidance
For 2023, the company projects adjusted diluted EPS to be in the range of $3.90-$4.20 per share. The company’s estimated free cash flow stands at approximately $975 million. The operating cash flow projection is approximately $1.3 billion. Its forecast of organic revenue growth lies between 6% and 8%.
Zacks Rank & Key Picks
LKQ currently carries a Zacks Rank #3 (Hold). You can see
. the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here A few top-ranked players in the auto space are Geely Automobile Holdings Limited ( GELYY Quick Quote GELYY - Free Report) , BYD Company Limited ( BYDDY Quick Quote BYDDY - Free Report) and Mercedes-Benz Group AG ( MBGAF Quick Quote MBGAF - Free Report) , all of which sport a Zacks Rank #1. Geely is engaged in automobile manufacturing and related areas. The Zacks Consensus Estimates for GELYY’s 2023 sales and earnings imply year-over-year growth of around 57.5% and 7.4%, respectively. BYD is engaged in the research, development, manufacture and distribution of automobiles, secondary rechargeable batteries and mobile phone components. The Zacks Consensus Estimate for BYDDY’s 2023 sales implies year-over-year growth of around 175%. MBGAF develops, manufactures and sells passenger cars, including premium and luxury vehicles. The Zacks Consensus Estimate for MBGAF’s 2023 sales implies year-over-year growth of 6%.