Auto parts distributor LKQ cuts profit outlook as commodity costs bite
July 27 (Reuters) - Auto parts distributor LKQ Corp lowered its full-year profit and sales guidance on Thursday, as falling commodity prices drag down growth prospects.
LKQ, which also sells scrap and other materials to metal recyclers, have been hurt by falling metal prices. The company had earlier forecast metal prices to be a headwind in coming quarters.
Supply chain disruptions, although improving, also continues to be a road bump for the auto industry as suppliers and producers grapple with raw material shortages, freight delays and high prices for energy and labor.
"(Q2) performances offset a steep year-over-year downturn in commodity prices, impacting our Self Service segment and the decrease in demand for our Specialty segment's offerings, headwinds that will impact these segments for the balance of 2023" CEO Dominick Zarcone said in a statement.
The Chicago, Illinois based company now sees earnings per share for 2023 between $3.65 and $3.85, down from its prior guidance of $3.68 to $3.98.
The supplier also trimmed the top end of its organic revenue growth guidance for parts and services to 7.5% from 8%, while maintaining the low end at 6%.
LKQ's second-quarter adjusted profits was almost in line with analysts ' estimates, as strong pricing actions offset most of its expenses.
The company reported an adjusted profit of $1.09 per share for the quarter ended June 30, compared with estimates of $1.08, according to Refinitiv IBES data.
Revenue for the quarter was $3.45 billion, slightly below analysts' expectations of $3.46 billion. (Reporting by Raechel Thankam Job; Editing by Maju Samuel)
