LKQ Corp. has announced results for its fourth quarter and full year ended Dec. 31, 2018. For the fourth quarter of 2018, revenue was $3 billion, an increase of 22 percent from $2.5 billion for the comparable period of 2017. Parts and services organic revenue growth for the fourth quarter of 2018 was 2.5 percent.
Net income from continuing operations attributable to LKQ stockholders for the fourth quarter of 2018 was $40 million, a decrease of 68 percent year-over-year. Diluted earnings per share from continuing operations attributable to LKQ stockholders for the fourth quarter of 2018 was 13 cents as compared to 41 cents for the same period of 2017, a decrease of 68 percent.
The fourth quarter 2018 results included non-cash impairment charges (net of tax) of $48 million related to the company’s equity investment in Mekonomen AB and $26 million related to goodwill recorded on our 2017 acquisition of an aviation parts recycler. These impairment charges reduced diluted earnings per share for the fourth quarter of 2018 by 23 cents. On an adjusted basis, net income from continuing operations attributable to LKQ stockholders was $151 million, an increase of 19.7 percent as compared to the $126 million for the same period of 2017. On an adjusted basis, diluted earnings per share from continuing operations attributable to LKQ stockholders for the fourth quarter of 2018 was 48 cents, an increase of 17.1 percent as compared to 41 cents for the same period of 2017.
“Looking back on 2018, I am proud of the team’s efforts to complete the Stahlgruber acquisition, produce solid organic growth across all our segments and effectively manage working capital to allow us to produce the highest annual operating cash flow figure in the company’s history. While I acknowledge that the 2018 results didn’t live up to our initial expectations due to operational challenges in parts of the business and economic headwinds, particularly in Europe, I believe that we are taking the necessary steps to position the company for continued success,” said Dominick Zarcone, president and CEO of LKQ Corp. “As we look forward to fiscal 2019, we will continue to execute on our productivity initiatives across each operating segment and remain focused on profitable revenue growth, margin enhancement, excellent cash conversion and optimizing our capital allocation strategy.”
For the full year of 2018, revenue was $11.9 billion, an increase of 22 percent from $9.7 billion for the comparable period of 2017. Parts and services organic revenue growth for the full year of 2018 was 4.4 percent. Net income from continuing operations attributable to LKQ stockholders for the full year of 2018 was $485 million, a decrease of 10.4 percent as compared to $540 million for the comparable period of 2017. Diluted earnings per share from continuing operations attributable to LKQ stockholders for the full year of 2018 was $1.53, a decrease of 12.1 percent as compared to $1.74 for the same period of 2017. The 2018 results included non-cash impairment charges (net of tax) of $71 million related to the company’s equity investment in Mekonomen AB and $26 million related to the fourth quarter goodwill write down. These impairment charges reduced diluted earnings per share for the full year of 2018 by 31 cents. On an adjusted basis, diluted earnings per share from continuing operations attributable to LKQ stockholders for the full year of 2018 was $2.19, an increase of 16.5 percent as compared to $1.88 for the same period of 2017.
During the fourth quarter of 2018, LKQ acquired three wholesale businesses in North America and two wholesale businesses in Europe for a total net consideration of approximately $14 million. Also in the fourth quarter, LKQ’s European operations opened five branches in Eastern Europe.
