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Advance Auto Parts' (AAP) Q1 Earnings: Is a Beat in Store?

Zacks Equity Research

Advance Auto Parts, Inc. AAP is set to report first-quarter 2019 results before the opening bell on May 22.

In the last reported quarter, the company delivered a positive surprise of 2.6%. Per the earnings record, it beat estimates in all of the trailing four quarters, the average beat being 5.5%.

In the past three months, shares of Advance Auto Parts have underperformed the industry it belongs to. The stock has lost 4.9% against 1.3% growth recorded by the industry during the period.

Advance Auto Parts, Inc. Price and EPS Surprise


Advance Auto Parts, Inc. Price and EPS Surprise

Advance Auto Parts, Inc. price-eps-surprise | Advance Auto Parts, Inc. Quote

Why a Positive Surprise is Likely in This Quarter

Our proven model predicts that Advance Auto Parts is likely to beat earnings estimates in this quarter. This is because a stock needs to have the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for increasing the odds of an earnings beat.

Earnings ESP: Advance Auto Parts has an Earnings ESP of +2.41% as the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $2.42 and $2.36, respectively. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Advance Auto Parts currently carries a Zacks Rank #3.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

What’s Driving Better-Than-Expected Earnings?

With the aim to gain additional market share, Advance Auto Parts is focusing on expansion through partnerships, increasing online presence and store openings. In January 2019, the company announced an alliance with the Midwest Auto Care Alliance to provide automotive parts and training support to its member facilities. This is likely to have a positive effect on its soon-to-be-released results.

The company is reaping benefits from enhanced online traffic, which is enabling it to offer the extensive portfolio of aftermarket auto parts, accessories and maintenance items to a larger customer base. All these are likely to have positive influence on its quarterly results.

Peer Releases

On Apr 30, Standard Motor Products Inc. SMP announced first-quarter fiscal 2019 earnings. In the reported quarter, the company posted earnings per share of 57 cents, missing the Zacks Consensus Estimate of 63 cents. During the reported quarter, total revenues were $283.8 million, which surpassed the Zacks Consensus Estimate of $280 million. The company currently carries a Zacks Rank of 3.

On Apr 30, Cummins Inc. CMI announced first-quarter 2019 earnings. The company posted earnings per share of $4.20 and revenues of $6 billion. Its quarterly numbers beat the respective Zacks Consensus Estimate. The company currently carries a Zacks Rank # 2.

On May 9, Westport Fuel Systems Inc. WPRT announced first-quarter 2019 results. During the quarter, the company’s net loss from continuing operations was 2 cents per share, narrower than the Zacks Consensus Estimate of loss of 5 cents. Also, its revenues surpassed estimates. The company currently carries a Zacks Rank # 2.

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Advance Auto Parts, Inc. (AAP) : Free Stock Analysis Report
Standard Motor Products, Inc. (SMP) : Free Stock Analysis Report
Westport Fuel Systems Inc. (WPRT) : Free Stock Analysis Report
Cummins Inc. (CMI) : Free Stock Analysis Report
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