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LKQ Corp Beats Q2 Earnings Estimates, Raises 2018 Outlook

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LKQ Corporation’s (LKQ - Free Report) second-quarter 2018 adjusted earnings from continuing operations came in at 61 cents per share, beating the Zacks Consensus Estimate of 58 cents. Also, the bottom line improved from the prior-year quarter’s 53 cents.
 
Adjusted net income from continuing operations was $192 million compared with $163 million in the year-earlier quarter.
 
In the second quarter, total revenues rose 23.3% to $3.03 billion from $2.46 billion a year ago and also surpassed Zacks Consensus Estimate of $2.88 billion. The company witnessed 7.2% organic revenue growth in parts and services, out of which its North American, European, and specialty segments contributed 7.4%, 8.3% and 4.1%, respectively.

LKQ Corporation Price, Consensus and EPS Surprise

Business Developments

In the second quarter of 2018, LKQ Corp announced closing of its acquisition of STAHLGRUBER GmbH (“STAHLGRUBER”), which includes 188 sales centers and approximately 128,000 square meter of an advanced logistics center located near Munich, Germany, serving more than 100,000 professional clients and offering over 500,000 SKUs.

Also, during the quarter, LKQ Corp acquired four wholesale businesses in Europe for consideration of approximately $7 million. European operations of LKQ Corp opened two and 15 new branches in Western Europe and Eastern Europe, respectively.

Financial Position
 
LKQ Corp had cash and cash equivalents of $345.2 million as of Jun 30, 2018, compared with $303.5 million as of Jun 30, 2017.
 
For the second quarter of 2018, LKQ Corp had net cash provided by operating activities of around $329 million.

2018 Outlook
 
For 2018, LKQ Corp expects organic revenue growth for parts & services in the range of 4.5-5.5% in comparison to the prior guidance of 4-5.5%.
 
Further, adjusted net income from continuing operations is expected in the range of $710-$735 million, up from the earlier guidance of $685-$715 million. Adjusted earnings per share from continuing operations in 2018 are expected in the band of $2.25 to $2.33, up from the prior $2.2-$2.3.

Zacks Rank & Other Key Picks
 
LKQ Corp has a Zacks Rank #1 (Strong Buy).
 
A few other top-ranked stocks in the auto space are Oshkosh Corporation (OSK - Free Report) , AB Volvo (VLVLY - Free Report) and Fox Factory Holding Corp. (FOXF - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Oshkosh has an expected long-term growth rate of 18.3%. Over the past year, shares of the company have moved up 5.3%.

AB Volvo has an expected long-term growth rate of 15%. Over the past year, shares of the company have gained 2.9%.

Fox Factory has an expected long-term growth rate of 15.8%. Shares of the company have risen 30.2% over the past year.

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