Headline: LKQ Stocks Slump as Q3 Earnings Fall Short of Expectations and Guidance is Lowered

ANTIOCH, Tenn. - LKQ Corporation (NASDAQ:LKQ) announced third-quarter results that fell short of expectations and lowered its annual outlook, causing shares to drop 1.3% in pre-market trading on Thursday. The automotive parts distributor reported adjusted earnings of $0.88 per share for Q3, which aligned with analyst estimates. However, revenue of $3.58 billion missed the consensus estimate of $3.66 billion.

LKQ experienced a decrease of 2.8% in organic revenue for parts and services on an annual basis, with a daily rate decrease of 4.3%. The company attributed the results to "overall softer volumes" and "uncontrollable market challenges."

Justin Jude, LKQ's President and CEO, stated, "Our third-quarter results reflect generally softer volumes, emphasizing the importance of executing our strategic transformation."

LKQ lowered its full-year 2024 adjusted earnings per share guidance to a range of $3.38-$3.52, below both the previous outlook of $3.50-$3.70 and the analyst consensus of $3.53. The company now expects organic revenue for parts and services to decline 2.75% to 1.75% annually, which is a downgrade from the previous forecast of -1.25% to +0.25% growth.

CFO Rick Galloway noted, "The revenue challenges experienced across our global operations have been more impactful than anticipated in our prior guidance, and we do not currently expect these headwinds to abate in the fourth quarter."

Despite the challenges, LKQ maintained its full-year free cash flow guidance of $850 million. The company repurchased $125 million worth of shares in Q3 and announced a $1 billion increase to its share repurchase program.