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Sep 30, 2023
LKQ Q3 2023 Earnings Report
LKQ's third quarter results reflected both tailwinds and headwinds, with strong organic growth in Wholesale - North America and Europe segments offset by unusual items in Europe, soft commodity prices, and difficult market conditions in Specialty and Self Service segments.
Key Takeaways
LKQ Corporation reported a 15% increase in revenue to $3.6 billion for the third quarter of 2023. Diluted EPS was $0.77, while adjusted diluted EPS was $0.86. The company experienced strong organic growth in its Wholesale - North America and Europe segments, but faced challenges due to unusual items in Europe, soft commodity prices, and difficult market conditions in its Specialty and Self Service segments.
Revenue of $3.6 billion, a 15% increase compared to the same period in 2022.
Parts and services organic revenue increased 3.0% (4.3% on a per day basis).
Diluted EPS of $0.77; adjusted diluted EPS of $0.86.
Third quarter operating cash flow of $441 million; free cash flow of $344 million.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
LKQ is reducing its full year guidance on revenue and earnings per share due to underperformance in the third quarter and expected fourth quarter effects from additional strike activity in Germany, the anticipated dilution from the Uni-Select acquisition, soft commodity prices, and a continuation of difficult market conditions for our Specialty and Self Service segments. The company is raising its free cash flow guidance due to continued solid cash flow generation.
Positive Outlook
- Organic revenue growth for parts and services: 4.75% to 5.75%
- Free cash flow approximately $1.0 billion
- Free cash flow conversion of Adjusted EBITDA 55% to 60%
Challenges Ahead
- Diluted EPS: $3.41 to $3.55
- Adjusted diluted EPS: $3.68 to $3.82
- Expected fourth quarter effects from additional strike activity in Germany
- Anticipated dilution from the Uni-Select acquisition
- Soft commodity prices, and a continuation of difficult market conditions for our Specialty and Self Service segments
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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