LKQ Gears up to Report Q2 Earnings: Here's What to Expect
LKQ Corporation LKQ is slated to release second-quarter 2023 results on Jul 27, before market open. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $1.06 and $3.41 billion, respectively.
For the second quarter, the consensus estimate for LKQ’s earnings per share has moved down by 3 cents in the past 90 days. Its bottom-line estimates imply a decline of 2.75% from the year-ago reported number.
But the Zacks Consensus Estimate for LKQ’s quarterly revenues suggests a 2.06% year-over-year rise. Over the trailing four quarters, LKQ surpassed earnings estimates on three occasions and missed once, the average surprise being 2.54%. This is depicted in the graph below:
LKQ Corporation Price and EPS Surprise
LKQ Corporation price-eps-surprise | LKQ Corporation Quote
Q1 Highlights
In first-quarter 2023, LKQ’s adjusted earnings per share of $1.04 surpassed the consensus mark of 96 cents, owing to higher year-over-year revenues from the Wholesale North American and Europe segment. The bottom line also rose 4% year over year. The company reported net sales of $3,349 million, outpacing the Zacks Consensus Estimate of $3,262 million. The top line remained unchanged from the year-ago level.
Factors at Play
LKQ’s North America and Europe segments have been performing well. The North America segment continues to benefit from pricing initiatives. The company’s 1 LKQ Europe program continues to aid results in the Europe segment with robust revenues and EBITDA growth. Moreover, strength in LKQ’s Specialty unit on the back of strong demand for recreational vehicles is buoying revenues.
Here's a sneak peek at the firm’s key revenue projections for the to-be-reported quarter.
Our estimate for quarterly revenues from parts and services in Europe, which has the highest contribution to the company’s revenues, is pegged at $1,500 million, suggesting a rise from $1,470 million recorded in the prior-year quarter.
We expect revenues from parts and services in North America unit for the second quarter to be around $1,103.7 million, indicating a rise from $1,050 million recorded in the prior-year period.
However, we expect quarterly revenues from parts and services in the Specialty segment to be around $447.5 million, implying a decline from $512 million reported in the prior-year quarter.
Declining prices of metal resulted in a gross margin headwind in the first quarter of 2023. The company expects low metal prices to continue to have a negative impact on the results of the quarter under review.
The development of technically enhanced components has escalated manufacturing and research and development costs. Restructuring and acquisition-related expenses are other headwinds.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for the automotive replacement parts supplier for the quarter to be reported, as it does not have the right combination of the two key ingredients. A positive Earnings ESP combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat..
Earnings ESP: LKQ has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate is in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With the Favorable Combination
Let’s take a look at some players from the auto space that, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:
Oshkosh Corporation OSK will release second-quarter 2023 results on Jul 27. The company has an Earnings ESP of +21.36% and a Zacks Rank #2.
The Zacks Consensus Estimate for Oshkosh’s to-be-reported quarter’s earnings and revenues is pegged at $1.62 per share and $2.24 billion, respectively. OSK surpassed earnings estimates once in the trailing four quarters and missed three times, the average negative surprise being 4.37%.
Lear Corporation LEA will release second-quarter 2023 results on Aug 1. The company has an Earnings ESP of +3.16% and a Zacks Rank #2.
The Zacks Consensus Estimate for Lear’s to-be-reported quarter’s earnings and revenues is pegged at $3.05 per share and $5.72 billion, respectively. LEA surpassed earnings estimates in all the trailing four quarters, the average surprise being 15.53%.
Magna International MGA will release second-quarter 2023 results on Aug 4. The company has an Earnings ESP of +1.53% and a Zacks Rank #3.
The Zacks Consensus Estimate for Magna’s to-be-reported quarter’s earnings and revenues is pegged at $1.25 per share and $10.17 billion, respectively. MGA surpassed earnings estimates in one of the trailing four quarters and missed thrice, the average negative surprise being 6.46%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Magna International Inc. (MGA) : Free Stock Analysis Report
Lear Corporation (LEA) : Free Stock Analysis Report
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LKQ Corporation (LKQ) : Free Stock Analysis Report
