LKQ Corporation’s revenue for the third quarter of 2023 was $3.6 billion, an increase of 15%, the company reported Thursday.
“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,” said Dominick Zarcone, president and CEO. “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,”
Parts and services organic revenue increased 3%, foreign exchange rates increased revenue by 3.6%, and the net impact of acquisitions and divestitures increased revenue by 10.5% year over year, for a total parts and services revenue increase of 17.1%, LKQ reported.
Other revenue for the third quarter of 2023 fell 17.5%, primarily due to weaker commodity prices relative to the same period in 2022.
Net income for the third quarter was $207 million as compared to $261 million for the same period in 2022. Diluted earnings per share for the third quarter was $0.77 as compared to $0.95 in 2022 – a decrease of 18.9%.
On an adjusted basis, net income in the third quarter was $231 million as compared to $266 million for the same period of 2022, a decrease of 13.2%.
Cash flow from operations and free cash flow were $441 million and $344 million, respectively, for the third quarter.
“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,” said Rick Galloway, senior vice president and CFO.
For more from LKQ’s third quarter earnings report, click here.
