LKQ Q3 2024 Earnings Report
Key Takeaways
LKQ Corporation reported a revenue increase of 0.5% to $3.6 billion in Q3 2024. Diluted EPS was $0.73, while adjusted diluted EPS reached $0.88. The company generated $420 million in operating cash flow and $341 million in free cash flow. LKQ repurchased $125 million of its shares and increased the stock repurchase program by $1 billion.
Revenue increased by 0.5% to $3.6 billion compared to Q3 2023.
Diluted EPS was $0.73, and adjusted diluted EPS was $0.88.
Operating cash flow was $420 million, with free cash flow reaching $341 million.
The company repurchased $125 million in LKQ shares and increased the stock repurchase program by $1 billion.
LKQ
LKQ
LKQ Revenue by Segment
LKQ Revenue by Geographic Location
Forward Guidance
LKQ updated its full-year 2024 outlook due to revenue headwinds, projecting a decline in organic revenue growth for parts and services, with adjusted diluted EPS expected to be in the range of $3.38 to $3.52. Despite the decrease in profitability, the company maintains its prior cash flow guidance by managing working capital and capital expenditures.
Positive Outlook
- Cost actions and synergy realization have boosted profitability.
- Prior cash flow guidance is being held despite the decrease in profitability.
- Working capital and capital expenditure management will help mitigate the impact of lower revenue.
- Global effective tax rate is assumed at 27.0%.
- Foreign currency exchange rates are applied near third quarter average levels.
Challenges Ahead
- Revenue headwinds experienced across global operations have been more impactful than projected.
- These headwinds are not expected to abate in the fourth quarter.
- Benefits from cost actions are not expected to offset the full impact of the lower revenue expectation.
- Organic revenue growth (decline) for parts and services is updated to (-2.75%) to (-1.75%).
- Diluted EPS is updated to $2.59 to $2.73.
Revenue & Expenses
Visualization of income flow from segment revenue to net income