LKQ Corp. reported record revenue for the third quarter of 2018 of $3.12 billion, an increase of 26.6 percent as compared to $2.47 billion in the third quarter of 2017. For the third quarter of 2018, parts and services organic revenue growth was 4.3 percent and acquisition revenue growth was 23.2 percent, while the impact of exchange rates was (0.6 percent), for total parts and services revenue growth of 26.9 percent.
Net income attributable to LKQ stockholders for the third quarter of 2018 was $134 million, up 9.6 percent year-over-year. On an adjusted basis, net income attributable to LKQ stockholders was $177 million, an increase of 26.9 percent as compared to the $140 million for the same period of 2017.
Diluted earnings per share attributable to LKQ stockholders for the third quarter of 2018 was 42 cents as compared to 39 cents for the same period of 2017, an increase of 7.7 percent. On an adjusted basis, diluted earnings per share attributable to LKQ stockholders for the third quarter of 2018 was 56 cents, an increase of 24.4 percent as compared to 45 cents for the same period of 2017.
Dominick Zarcone, president and CEO of LKQ Corp., said, “I am pleased with the trajectory of our operational initiatives that are focused on a more balanced approach of delivering organic growth while simultaneously optimizing productivity and profitability. I am particularly pleased with the improvement in year-over-year Segment EBITDA margins for our Europe and Specialty segments. Additionally, North America’s Segment EBITDA margin decline was significantly less than the seasonal drop experienced in the prior two years. The continued narrowing of this seasonal gap validates our North America team’s efforts to drive margin improvement, despite the ongoing headwinds of wage and freight inflation, and the recent impact of lower scrap prices.”
On a nine-month year-to-date basis, revenue was $8.88 billion, an increase of 22.1 percent from $7.27 billion for the comparable period of 2017. Parts and services organic revenue growth for the first nine months of 2018 was 5.1 percent. Net income from continuing operations attributable to LKQ stockholders for the first nine months of 2018 was $444 million, an increase of 7.2 percent as compared to $414 million for the comparable period of 2017. Diluted earnings per share from continuing operations attributable to LKQ stockholders for the first nine months of 2018 was $1.41, an increase of 6 percent as compared to $1.33 for the same period of 2017. On an adjusted basis, diluted earnings per share from continuing operations attributable to LKQ stockholders for the first nine months of 2018 was $1.71, an increase of 16.3 percent as compared to $1.47 for the same period of 2017.
Other Events
On Oct. 25, 2018, the company announced that its board of directors authorized a stock repurchase program. Under the program, LKQ Corp. may purchase up to $500 million of its common stock from time to time through Oct. 25, 2021. The timing and the amount of any repurchases of common stock will be determined by LKQ management based on its evaluation of market conditions and other factors. As of Sept. 30, the company had 318.2 million shares of common stock outstanding.
During the third quarter of 2018, LKQ acquired three wholesale businesses in Europe for a total net consideration of approximately $79 million. Also in the third quarter, LKQ’s European operations opened seven branches in Eastern Europe.
