Auto parts distributor LKQ cuts profit outlook as commodity costs bite

Uni-Select

27/07/2023 12:22

July 27 (Reuters) - Auto parts distributor LKQ Corp
 LKQ.O  lowered its full-year profit and sales guidance on
Thursday, as falling commodity prices drag down growth
prospects.
    LKQ, which also sells scrap and other materials to metal
recyclers, have been hurt by falling metal prices. The company
had earlier forecast metal prices to be a headwind in coming
quarters.
    Supply chain disruptions, although improving, also continues
to be a road bump for the auto industry as suppliers and
producers grapple with raw material shortages, freight delays
and high prices for energy and labor.
    "(Q2) performances offset a steep year-over-year downturn in
commodity prices, impacting our Self Service segment and the
decrease in demand for our Specialty segment's offerings,
headwinds that will impact these segments for the balance of
2023" CEO Dominick Zarcone said in a statement.
    The Chicago, Illinois based company now sees earnings per
share for 2023 between $3.65 and $3.85, down from its prior
guidance of $3.68 to $3.98.
    The supplier also trimmed the top end of its organic revenue
growth guidance for parts and services to 7.5% from 8%, while
maintaining the low end at 6%.
    LKQ's second-quarter adjusted profits was almost in line
with analysts ' estimates, as strong pricing actions offset most
of its expenses.
    The company reported an adjusted profit of $1.09 per share
for the quarter ended June 30, compared with estimates of $1.08,
according to Refinitiv IBES data.
    Revenue for the quarter was $3.45 billion, slightly below
analysts' expectations of $3.46 billion.

 (Reporting by Raechel Thankam Job; Editing by Maju Samuel)
 ((RaechelThankam.Job@thomsonreuters.com;))