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LKQ Corp (LKQ) Q4 Earnings Beat, Revenues Miss Estimates

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LKQ Corporation (LKQ - Free Report) reported adjusted earnings of 54 cents per share in the fourth quarter of 2019, surpassing the Zacks Consensus Estimate of 52 cents. The bottom line also increased 13% year over year. Higher year-over-year revenues from the North American segment led to this outperformance.

Quarterly revenues came in at 3,009 million, missing the Zacks Consensus Estimate of $3,015 million. However, the top line increased from the year-ago level of $3,002 million. The company witnessed 0.9% organic revenue growth in parts and services. Revenue growth from acquisitions was 0.2% year on year.

LKQ Corporation Price, Consensus and EPS Surprise

Segment Highlights

Revenues from the North American unit totaled $1,283 million, up 2.3% year over year. EBITDA from the segment came in at $179.96 million, up from the year-ago figure of $153.38 million.

Revenues from the European segment totaled $1,425 million, down 0.14% year over year. EBITDA from the segment came in at $107.93 million, up 0.93% year over year.

Revenues and EBITDA from the Specialty segment came in at $303.35 million and $25.39 million, down from the year-ago figure of $322.95 million and $27.55 million, respectively.

Financial Position

LKQ Corp had cash and cash equivalents of $523.02 million as of Dec 31, 2019. Long-term debt amounted to $3,715 million. Its debt-to-capital ratio stands at 44.46%. At the end of fourth-quarter 2019, the company generated net cash of $98.86 million from operations, lower than the $189.57 million witnessed in the comparable year-ago period. The company generated negative free cash flow of $1.31 million in the quarter compared with the year-earlier quarter’s $111.3 million.

2020 Outlook

For 2020, LKQ Corp forecasts adjusted diluted EPS of $2.46-$2.58. Organic revenue growth for parts & services is projected at 0.5-2.5% and adjusted net income is estimated to be $757-$793 million. Capex is anticipated to lie in the range of $250 million to $300 million, and cash flow from operations is forecast in the band of $1-$1.5 billion.

Zacks Rank & Stocks to Consider

LKQ Corp currently carries a Zacks Rank #3 (Hold)

Some better-ranked stocks in the Auto-Tires-Trucks sector include BRP Inc. DOOO, Fox Factory Holding Corp. (FOXF - Free Report) and SPX Corporation SPXC, each carrying a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

BRP has a projected earnings growth rate of 20.17% for 2020. Its shares have surged 95.7% over the past year.

Fox Factory has an estimated earnings growth rate of 9.67% for the ongoing year. The company’s shares have appreciated 16.1% in a year’s time.

SPX has an expected earnings growth rate of 6.52% for the current year. The stock has rallied 35.1% in the past year.

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