LKQ sees slight income drop in Q3

LKQ Corp., an Antioch, Tennessee-based automotive dismantling and parts firm, has reported third-quarter 2024 revenue of $3.6 billion, marking a 0.5 percent increase compared with the same period in 2023. The company’s net income of $192 million, however, was down by 7.7 percent compared with the $207 million earned in the summer months of 2024.

“Our third-quarter results reflect softer overall volumes,” LKQ President and CEO Justin Jude says. “Our focus on managing our operating expenses is critically important, especially in a period when the top line is facing uncontrollable market headwinds.

"We remain confident in the long-term earnings potential of our businesses as we navigate short-term industry dynamics and a difficult macro-economic environment that will continue to affect the business in the fourth quarter.”

Year to date, LKQ has posted revenue of just under $11 billion, a 6.1 percent increase from the $10.365 billion in revenue garnered in the first nine months of 2023. The company’s year-to-date net income of $536 million, however, is down by 29.5 percent compared with $760 million it earned from January through September of 2023.

In its most recently completed quarter, LKQ's parts and services organic revenue decreased 2.8 percent, but the net impact of acquisitions and divestitures increased revenue by 3.1 percent.

Other revenue fell 2.2 percent primarily because of lower commodities prices and volumes relative to the same period in 2023, LKQ adds, likely referring to prices in the ferrous scrap market into which it sells its auto hulks.

In comments accompanying its results, LKQ mentions two divestments in Europe.

“In July 2024, we divested our operations in Poland to Mekonomen and we closed on the divestiture of our Bosnia operations in September 2024,” the company says.

“The revenue headwinds we experienced across our global operations have been more impactful than projected in our prior guidance, and we currently do not expect these headwinds to abate in the fourth quarter," LKQ Chief Financial Officer Rick Galloway adds.

“We are holding [to] our prior cash flow guidance despite the decrease in profitability as we expect to mitigate the impact through working capital and capital expenditure management.”