What Happened?
Shares of automotive parts company LKQ (NASDAQ: LKQ) jumped 6.2% in the morning session after it reported third-quarter profits that significantly beat Wall Street's expectations, overshadowing a slight revenue miss and a cut to its full-year guidance.
The vehicle components provider posted adjusted earnings of 84 cents per share, which was well ahead of the average analyst estimate of 76 cents. Revenue for the period came in at $3.50 billion, just missing the $3.53 billion consensus. Despite management lowering its full-year adjusted profit guidance to a midpoint of $3.08 per share, investors appeared to focus on the strong bottom-line outperformance in the quarter. The 11% earnings beat demonstrated better-than-expected profitability, which was enough to send the shares higher even with the mixed overall report.
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What Is The Market Telling Us
LKQ’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 21% on the news that the company reported disappointing second-quarter 2025 results and lowered its full-year financial outlook. The company's adjusted earnings per share (EPS) fell short of analyst expectations, coming in at $0.87 versus an anticipated $0.92. Revenue declined 1.9% year-over-year to $3.6 billion. Compounding the issue, LKQ lowered its full-year 2025 guidance, projecting a decline in organic revenue and cutting its adjusted EPS forecast to a range of $3.00 to $3.30, down from a prior estimate of $3.40 to $3.70. Management pointed to several challenges, including a delayed recovery in repairable claims in North America, the impact of tariffs, and soft market conditions in both North America and Europe, which contributed to the weaker performance and outlook.
LKQ is down 13% since the beginning of the year, and at $31.55 per share, it is trading 28.4% below its 52-week high of $44.05 from March 2025. Investors who bought $1,000 worth of LKQ’s shares 5 years ago would now be looking at an investment worth $986.09.
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