LKQ announces results for Q3 2023

Revenue up 15 percent

LKQ

LKQ Corporation has reported its third quarter 2023 financial results, posting a revenue of $3.6 billion – a 15 percent increased compared to the same period in 2022.

For the third quarter of 2023, parts and services organic revenue increased 3.0 percent (4.3 percent on a per day basis), foreign exchange rates increased revenue by 3.6 percent and the net impact of acquisitions and divestitures increased revenue by 10.5 percent year over year, for a total parts and services revenue increase of 17.1 percent.

Other revenue for the third quarter of 2023 fell 17.5 percent, primarily due to weaker commodity prices relative to the same period in 2022.

Dominick Zarcone, president and CEO, said: “Our third quarter results reflected some tailwinds and headwinds. On the positive side, we experienced strong organic growth in our Wholesale – North America and Europe segments, drove excellent margins in Wholesale – North America, and generated robust free cash flow.

“Unfortunately, these strengths were offset by a combination of unusual, transitory items in Europe, continued softness in commodity prices, and difficult market conditions impacting our Specialty and Self Service segments.

“Our success since implementing the operational excellence strategy in 2019 gives us confidence in our ability to take decisive actions and drive improved execution. We have great assets and an exceptional team, which we believe will enable long-term growth and value creation. The fundamentals of our business remain strong.”

Net income for the third quarter of 2023 was $207 million as compared to $261 million for the same period in 2022. Diluted earnings per share2 for the third quarter of 2023 was $0.77 as compared to $0.95 for the same period of 2022, a decrease of 18.9 percent.

On an adjusted basis, net income in the third quarter of 2023 was $231 million as compared to $266 million for the same period of 2022, a decrease of 13.2 percent. Adjusted diluted earnings per share was $0.86 for the third quarter of 2023 as compared to $0.97 for the same period of 2022, a decrease of 11.3 percent.

In October 2023, LKQ entered into a definitive agreement to sell GSF Car Parts Limited. The sale was completed on 25 October 2023.

2023 Outlook

Rick Galloway, senior vice president and chief financial officer, added: “We are reducing our full year guidance on revenue and earnings per share due to our underperformance in the third quarter and expected fourth quarter effects from additional strike activity in Germany, the anticipated dilution from the Uni-Select acquisition, soft commodity prices, and a continuation of difficult market conditions for our Specialty and Self Service segments.

”We are raising our free cash flow guidance due to our continued solid cash flow generation.”

The outlook for the full year 2023 is based on current conditions and recent trends, and assumes a global effective tax rate of 27.0 percent, the prices of scrap and precious metals hold near the September average, and no further deterioration due to the Ukraine/Russia conflict.

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