LKQ Gears Up to Report Q3 Earnings: What's in the Cards?
LKQ Corporation LKQ is slated to release third-quarter 2023 results on Oct 26, before market open. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at 95 cents and $3.49 billion, respectively.
For the third quarter, the consensus estimate for LKQ’s earnings per share has decreased by 2 cents in the past 30 days. Its bottom-line estimates imply a decline of 2.06% from the year-ago reported number.
The Zacks Consensus Estimate for LKQ’s quarterly revenues suggests a 12.4% year-over-year rise. Over the trailing four quarters, it surpassed earnings estimates on three occasions and missed once, the average surprise being 1.53%. This is depicted in the graph below:
LKQ Corporation Price and EPS Surprise
LKQ Corporation price-eps-surprise | LKQ Corporation Quote
Q2 Highlights
In second-quarter 2023, LKQ’s adjusted earnings per share of $1.09 surpassed the consensus mark of $1.06. The bottom line remained unchanged from the year-ago level. The company reported net sales of $3,448 million, outpacing the Zacks Consensus Estimate of $3,418 million. The top line also increased by 3.1% year over year.
Factors at Play
LKQ’s strategic acquisitions are boosting its prospects. The buyouts of Bumblebee Batteries, Elite Electronics, Green Bean Battery, SeaWide Marine Distribution, Greenlight and Fabtech Industries have bolstered the firm’s product offerings and sales.
In July, LKQ experienced strong tailwinds driven by several synergistic acquisitions. The company also divested a non-core business in its Specialty segment. These strategic moves are likely to have bolstered the third quarter’s results.
In 2023, the average age of a new vehicle in the United States rose to 12.5 years, up from 12.2 years in 2022. Ageing vehicles have higher demand for spare and replacement parts. Rising demand for replacement parts is likely to bolster LKQ’s third quarter result.
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 $1,533.8 million, suggesting a rise from $1,376 million recorded in the prior-year quarter.
We expect revenues from parts and services in the North America unit for the third quarter to be $1,255 million, indicating a rise from $1,026 million recorded in the prior-year period.
However, we expect quarterly revenues from parts and services in the Specialty segment to be $402.7 million, implying a decline from $452 million reported in the prior-year quarter. LKQ's Specialty segment is facing headwinds in the RV portion of its business.
Across all its segments, LKQ is witnessing some supply chain disruptions, resulting in product scarcity and freight delays. Problems related to freight costs and container capacity constraints are expected to continue to play spoilsport in the third quarter.
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 #3.
Stocks With the Favorable Combination
Here are a few players from the auto space that, according to our model, have the right combination of elements to post an earnings beat this time around.
Ford Motor Company F will release third-quarter 2023 results on Oct 26. The company has an Earnings ESP of +14.57% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Ford’s to-be-reported quarter’s earnings and revenues is pegged at 40 cents per share and $38.21 billion, respectively. F surpassed earnings estimates twice in the trailing four quarters and missed twice, the average surprise being 20.11%.
Oshkosh Corporation OSK will release third-quarter 2023 results on Oct 26. The company has an Earnings ESP of +8.24% and a Zacks Rank #3.
The Zacks Consensus Estimate for Oshkosh’s to-be-reported quarter’s earnings and revenues is pinned at $2.18 per share and $2.46 billion, respectively. OSK surpassed earnings estimates twice in the trailing four quarters and missed twice, the average surprise being 27.45%.
Cummins CMI will release third-quarter 2023 results on Nov 2. The company has an Earnings ESP of +0.48% and a Zacks Rank #3.
The Zacks Consensus Estimate for Cummin’s to-be-reported quarter’s earnings and revenues is pegged at $4.70 per share and $8.19 billion, respectively. CMI surpassed earnings estimates once in the trailing four quarters and missed thrice, the average negative surprise being 5.51%.
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LKQ Corporation (LKQ) : Free Stock Analysis Report
