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LKQ Q4 Earnings and Revenues Miss Estimates, Improve Y/Y

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LKQ Corporation’s (LKQ - Free Report) fourth-quarter 2018 adjusted earnings from continuing operations were 48 cents per share, missing the Zacks Consensus Estimate of 49 cents. The bottom line improved from the prior-year quarter’s 41 cents. Adjusted net income from continuing operations was $151.3 million compared with $126.4 million in the year-ago quarter.

In the fourth quarter, total revenues rose 21.6% to $3 billion from $2.47 billion a year ago. Its lightly missed the Zacks Consensus Estimate of $3.01 billion. The company witnessed 4.4% organic revenue growth in parts and services.

2018 Results

In 2018, LKQ’s earnings were $2.19, upfrom $1.88 in 2017.

In the same year, LKQ’s revenues were $11.9 billion, up 22% from the 2017 figure.

Business Developments

On Nov 26, 2018, LKQ reset its credit facility to $3.5 billion.

In fourth-quarter 2018, LKQ acquired three wholesale businesses in North America and two wholesale businesses in Europe for around 14 million. LKQ’s European operations opened five branches in eastern Europe.

Financial Position

LKQ had cash and cash equivalents of $337.3 million as of Dec 31, 2018, compared with $279.8 million as of Dec 31, 2017.

For the year ended Dec 31, 2018, LKQ had net cash provided by operating activities of around $710.7 million.

2019 Outlook

For 2019, LKQ expects organic revenue growth of 2-4%for parts & services.

Further, adjusted net income from continuing operations is expected to be $732-$771 million. Adjusted earnings per share from continuing operations in 2019 are expected to be $2.34-$2.46.

Zacks Rank & Stocks to Consider

LKQ currently has a Zacks Rank #4 (Sell).

A few better-ranked stocks in the broader auto sector are General Motors Company (GM - Free Report) , Valeo S.A. (VLEEY - Free Report) and Ferrari N.V. (RACE - Free Report) . General Motors and Valeo currently carry a Zacks Rank #2 (Buy) while Ferrari sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

General Motors has an expected long-term growth rate of 8.5%. Shares of the company have gained 4% in the past month.

Valeo has an expected long-term growth rate of 0.5%. Share price of the company has increased 5.6% in the past month.

Ferrari has an expected long-term growth rate of 18.5%. Over the past month, shares of the company have gained 16.4%.

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