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LKQ Corp (LKQ) Crushes Q3 Earnings & Sales Estimates, Ups '21 View

For 2021, LKQ Corp (LKQ) projects adjusted diluted EPS in the range of $3.78-$3.88 per share, up from the previous estimate of $3.55-$3.75 per share.

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This story originally appeared on Zacks

LKQ Corporation LKQ reported adjusted earnings of $1.02 per share in third-quarter 2021, surpassing the Zacks Consensus Estimate of 86 cents. This outperformance was driven by the higher-than-anticipated contribution from the North American and European markets.



Moreover, the bottom line comes in higher than the year-ago quarter’s profit of 75 cents per share, up 36% year on year.



This aftermarket auto parts distributor registered quarterly revenues of $3,296.6 million, marginally beating the Zacks Consensus Estimate of $3,737 million. In addition, the top-line figure climbed 8.2% from the year-ago level of $3,047.7 million. The parts and services organic revenues also increased 4% year over year.

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LKQ Corporation Price, Consensus and EPS Surprise

LKQ Corporation Price, Consensus and EPS Surprise

LKQ Corporation price-consensus-eps-surprise-chart | LKQ Corporation Quote

Segment Highlights

For the September-end quarter, revenues from the North American segment totaled $1,307 million, up from the $1,164.2 million reported in the prior-year period. Also, the segment’s EBITDA came in at $225.9 million, up 10.2% year over year. The reported EBITDA figure also marginally outpaced the Zacks Consensus Estimate of $222 million.



Revenues from the European segment summed $1,525.3 million for the reported quarter, up from the $1,484.1 million recorded in the year-earlier quarter. The segment’s EBITDA came in at $175.1 million, jumping 28.6% year over year. The reported figure also beat the consensus mark of $163 million.

For the July-September period, revenues and EBITDA from the Specialty segment came in at $465.8 million and $51.6 million, higher than the year-ago figure of $400.4 million and $136.2 million, respectively. The reported EBITDA, however, lagged the consensus mark of $60 million.

Financial Position & Dividend

LKQ Corp had cash and cash equivalents of $402.7 million as of Sep 30, 2021, up from the $312.2 million recorded as of Dec 31, 2020. The long-term debt (excluding current portion) amounted to $2,348.4 million as on Sep 30, 2021, down from the $2,812.6 million recorded as of Dec 31, 2020. In addition, as of Sep 30, 2021, LKQ Corp’s balance sheet reflects net debt of $2 billion.

 

During the third quarter, the company generated net cash of $429 million from operations, up a whopping 93.6% from the year-ago period. It generated free cash flow of $384 million, skyrocketing 103.2% year over year. During the reported quarter, the company repurchased 6.2 million shares of its common stock. Since the inception of its repurchase program, the company has repurchased 4.3 million shares for a total of $219 million.



On Oct 26, management announced the company's first ever quarterly cash dividend of 25 cents per share, to be paid on Dec 2 to stockholders as on Nov 11, 2021.

2021 Guidance Up

For 2021, the company projects diluted EPS in the range of $3.48-$3.58 per share and adjusted diluted EPS of $3.78-$3.88 per share, up from the previous estimate of $3.23-$3.43 per share per share and $3.55-$3.75 per share, respectively.



The company envisions generating free cash flow in the range of $1.15-$1.3 billion, up from the earlier forecast of $950-$1,050 million.

Zacks Rank & Stocks to Consider

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

Better-ranked stocks in the auto sector include Tesla TSLA, Goodyear Tire GT and BRP Inc. DOOO, all of which sport a Zacks Rank of 1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.



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