(Reuters) – Auto parts distributor LKQ Corp beat fourth-quarter profit estimates on Thursday, helped by robust aftermarket sales and cost cuts.
Inflationary pressures and elevated borrowing costs are driving Americans to repair their older vehicles to keep them roadworthy, instead of buying new cars, driving up demand for spare parts.
“We also believe that in 2024, our margin enhancement initiatives will boost profitability, including a return to double digit Europe Segment EBITDA margins,” said CFO Rick Galloway.
The Chicago, Illinois-based company reported an adjusted earnings per share of 84 cents for the fourth quarter, beating analysts’ estimates of 76 cents, according to LSEG IBES data.
LKQ, which also sells scrap and other materials to metal recyclers, posted sales of $3.50 billion for the three months ended Dec 31, just below estimates of $3.52 billion.
The supplier forecast adjusted earnings per share between $3.90 and $4.20 for 2024, compared to analysts’ estimates of $4.11 per share.
LKQ also forecast organic revenue growth for parts and services between 3.5% and 5.5% for 2024.
(Reporting by Raechel Thankam Job; Editing by Ravi Prakash Kumar)
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