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Advance Auto Parts (AAP) Q3 Earnings Top Estimates, Down Y/Y

Zacks Equity Research

Advance Auto Parts Inc. AAP reported adjusted earnings of $1.43 per share in the third quarter of fiscal 2017 (ended Oct 7), declining 17.3% from $1.73 in the prior-year quarter. The figure, however, surpassed the Zacks Consensus Estimate of $1.22. Adjusted operating income declined to $172.2 million from $217.6 million in the third quarter of fiscal 2016.

Advance Auto Parts reported revenues of $2.18 billion, missing the Zacks Consensus Estimate of $2.21 billion. Revenues were 3% lower than the year-ago quarter figure. During the quarter, comparable store sales (comps) were down 3.4% year over year.

Gross profit declined to $947.7 million in the reported quarter from $988.2 million a year ago. Gross margin declined 51 basis points year over year to 43.4%.

Adjusted selling, general and administrative (SG&A) expenses totaled $775.5 million or 35.5% of sales compared with $770.6 million or 34.3% in the year-ago period.

Dividend

On Nov 7, 2017, the board of directors of Advance Auto Parts announced a regular quarterly dividend of 6 cents per share. The dividend will be paid on Jan 5, 2018, to stockholders on record as of Dec 22, 2017.

Financial Position

Advance Auto Parts had cash and cash equivalents of $363.3 million as of Oct 7, 2017, up from $135.2 million as of Dec 31, 2016. Total long-term debt was $1.04 billion as of Oct 7, 2017, almost unchanged from the Dec 31, 2016 figure.

For the fiscal third quarter, operating cash flow was $401 million compared with $427 million in the year-ago period.

Store Update

As of Oct 7, 2017, Advance Auto Parts operated 5,074 stores and 129 Worldpac branches and served approximately 1,250 independently owned Carquest stores.

Advance Auto Parts currently carries a Zacks Rank #3 (Hold).

A few better-ranked automobile stocks worth considering are Allison Transmission Holdings, Inc. ALSN, PACCAR Inc PCAR and Cummins Inc. CMI. While Allison Transmission Holdings and PACCAR sport a Zacks Rank #1 (Strong Buy), Cummins carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Transmission Holdings has a long-term growth rate of 10%.

PACCAR has a long-term growth rate of 10%.

Cummins has an expected long-term earnings-per-share growth rate of 12.1%.

Advance Auto Parts Inc Price, Consensus and EPS Surprise

Advance Auto Parts Inc Price, Consensus and EPS Surprise | Advance Auto Parts Inc Quote

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