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LKQ to Release Q4 Earnings: What Should Investors Expect?

LKQ Corporation LKQ is slated to release fourth-quarter 2022 results on Feb 23, before market open. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at 84 cents and $3.01 billion, respectively.

For the fourth quarter, the consensus estimate for LKQ’s earnings per share has moved down by 1 cent in the past 60 days. Its bottom line estimates imply a decline of 3.45% from the year-ago reported number. The Zacks Consensus Estimate for LKQ’s quarterly revenues also suggests a 5.39% year-over-year decrease. Over the trailing four quarters, LKQ surpassed earnings estimates on all occasions, the average surprise being 7.96%. This is depicted in the graph below:

LKQ Corporation Price and EPS Surprise

 

LKQ Corporation Price and EPS Surprise
LKQ Corporation Price and EPS Surprise

LKQ Corporation price-eps-surprise | LKQ Corporation Quote

Q3 Highlights

In third-quarter 2022, LKQ’s adjusted earnings per share of 97 cents surpassed the consensus mark of 95 cents, owing to higher-than-expected revenues from the Wholesale North American segment. However, the bottom line fell 4.3% year over year. The company reported net sales of $3,104 million, missing the Zacks Consensus Estimate of $3,209 million. In addition, the top line fell 5.9% from the year-ago level.

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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: LKQ has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate is equal to the Zacks Consensus Estimate.

Zacks Rank: It currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors at Play

While the increasing longevity of vehicles is expected to have boosted the demand for LKQ’s products in the to-be-reported quarter, supply-chain snarls, high freight costs and container capacity constraints are likely to have played spoilsports. As LKQ has a global presence, it is anticipated to have borne the brunt of adverse forex translations. Commodity cost inflation is likely to have clipped margins in the to-be-reported quarter.

Here's a sneak peek at the firm’s key revenue projections for the to-be-reported quarter.

The Zacks Consensus Estimate for quarterly revenues from parts and services in Europe, which have the highest contribution to the company’s revenues, is pegged at $1,347 million, suggesting a decline from $1,497 million recorded in the prior-year quarter. The consensus estimate for revenues from parts and services in North America unit for the fourth quarter is pegged at $1,006 million, indicating a fall from $1,280 million recorded in the prior-year period. The Zacks Consensus Estimate for quarterly revenues from parts and services in the Specialty segment is $413 million, implying a rise from $410 million reported in the prior-year quarter.

Stocks With Favorable Combinations

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:

The Shyft Group SHYF will release fourth-quarter 2022 results on Feb 23. The company has an Earnings ESP of +2.98% and a Zacks Rank #3.

The Zacks Consensus Estimate for Shyft Group’s to-be-reported quarter’s earnings and revenues is pegged at 45 cents per share and $314.6 million, respectively. SHYF surpassed earnings estimates in all the trailing four quarters, the average surprise being 16.11%.

Vroom VRM will release fourth-quarter 2022 results on Feb 28. The company has an Earnings ESP of +7.50% and a Zacks Rank #3.

The Zacks Consensus Estimate for Vroom’s to-be-reported quarter’s loss and revenues is pegged at 60 cents per share and $256.73 million, respectively. VRM surpassed earnings estimates in two of the trailing four quarters and missed in the rest, the average surprise being 1.43%.

CarGurus CARG will release fourth-quarter 2022 results on Feb 28. The company has an Earnings ESP of +58.49% and a Zacks Rank #3.

The Zacks Consensus Estimate for CarGurus’ to-be-reported quarter’s earnings and revenues is pegged at 9 cents per share and $279.28 million, respectively. CARG surpassed earnings estimates in three of the trailing four quarters and missed on the other, the average surprise being 10.56%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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