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LKQ Corp (LKQ) to Report Q2 Earnings: What's in the Offing?

Zacks Equity Research

LKQ Corporation LKQ is set to report second-quarter 2019 results, before the opening bell on Jul 25.

In the last reported quarter, its earnings surpassed estimates. The company lagged estimates in one of the trailing four quarters, beat the same twice and meet the mark once. The average positive earnings surprise was 1.2%.

In the past six months, shares of LKQ Corp have outperformed the industry it belongs to. The stock has moved down 3.4% compared with the industry’s 8% decline.

Let’s see, how things have shaped up for the upcoming announcement.

LKQ Corporation Price and EPS Surprise


LKQ Corporation Price and EPS Surprise

LKQ Corporation price-eps-surprise | LKQ Corporation Quote


Factors Influencing the Second Quarter

Recurrent consolidations in almost every quarter and of course in second-quarter 2019, along with the rising selling, general and administrative expenses due to rent and utilities plus freight and fuel costs, will impact LKQ Corp’s bottom line. The uncertainty in Europe’s economic conditions is another headwind, which is likely to adversely affect the company in the second quarter.

LKQ Corp, which is a supplier of automotive alternative and specialty parts, is expanding presence through frequent acquisitions. Partnerships among the industry majors are also likely to affect the company’s margin during the soon-to-be-reported quarter.

Earnings Whispers

Our proven model does not conclusively predict that LKQ Corp is likely to beat on earnings this earning season. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Earnings ESP: LKQ Corp has an Earnings ESP of -2.80%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: LKQ Corp currently carries a Zacks Rank #4 (Sell).

Please note that we caution against the stocks with a Rank of 4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Stocks to Consider

Here are a few auto stocks worth considering, comprising the right combination of elements to come up with an earnings beat this time around:

Cummins Inc CMI currently has an Earnings ESP of +3.48% and a Zacks Rank of 3. It is slated to release second-quarter 2019 results on Jul 30. You can see the complete list of today’s Zacks #1 Rank stocks here.

Penske Automotive Group, Inc PAG presently has an Earnings ESP of +0.42% and a Zacks Rank of 3. It is slated to release second-quarter 2019 results on Jul 30.

Dana Incorporated DAN has an Earnings ESP of +0.45% and a Zacks Rank of 3 at present. It is slated to release second-quarter 2019 results on Jul 31.

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