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O'Reilly shares hit new high on strong 1Q, outlook

NEW YORK (AP) -- O'Reilly Automotive hit an all-time high in Thursday trading after the auto parts retailer reported better-than-expected first-quarter earnings and boosted its profit guidance for the full year.

THE SPARK: O'Reilly said late Wednesday that it earned $54.3 million, or $1.36 per share, while analysts polled by FactSet expected a profit of $1.35 per share.

For the full year 2013, Springfield, Mo., company said it now expects to post a profit of $5.64 to $5.74 per share, up from its February prediction of $5.57 to $5.67 per share. It backed its previous revenue prediction of $6.6 billion to $6.7 billion.

Analysts expect a 2013 profit of $5.71 per share on $6.66 billion in revenue.

O'Reilly also said it expects to post a second-quarter profit of $1.46 to $1.50 per share, ahead of average analysts' predictions of $1.45 per share.

THE BIG PICTURE: The strong first-quarter profit came despite lower-than-expected sales. O'Reilly's revenue rose 4 percent to $1.59 billion, slightly short of analysts' expectations of $1.61 billion.

Revenue at stores open at least a year increased 0.6 percent, or 1.9 percent excluding the effects of Leap Day in 2012. The metric is a key measure of a retailer's health, because it excludes revenue from stores that recently opened or closed.

O'Reilly noted that it faced tough year-ago sales comparisons. Excluding Leap Day, its revenue at stores open at least a year rose 6.1 percent in the first quarter of 2012, helped by unusually warm weather.

Now that spring weather has arrived in many of its markets, the company said it is seeing stronger sales volumes.

THE ANALYSIS: Citi analyst Kate McShane said O'Reilly will face easier sales comparisons for the rest of the year.

But McShane, who backed her "Neutral" rating and $108 price target for the stock, said she would still hold off buying the company's shares based on their current price. She pointed to AutoZone Inc. as a more attractive investment.

THE SHARES: Up $5.10, or 5 percent, to $106.22 in afternoon trading, after climbing to a new all-time high of $108.98 earlier in the day.

Since the beginning of this year, shares of O'Reilly Automotive Inc. have gained about 13 percent.