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O'Reilly Automotive surges on 1Q earnings beat and increased full-year EPS guidance

Last updated: 09:57 26 Apr 2018 EDT, First published: 09:06 26 Apr 2018 EDT

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Outlook for 2018 profits is up from forecast made in February

O'Reilly Automotive Inc. (NASDAQ:ORLY) shares shot higher on first-quarter earnings that modestly beat analyst estimates and revised full-year earnings guidance that raised the range of expected profits.

O'Reilly said first-quarter net income rose 15%, to US$304.9mln from US$264.9mln in the first quarter of 2017. Per-share profits were up even more, climbing 27.5% to US$3.61 from US$2.83, because of fewer shares outstanding this year. Yahoo Finance put the average earnings estimate of analysts at US$3.58.

Revenue at the auto parts retailer increased 5.5%, to US$2.28bn from US$2.16bn. The revenue figure was in line with analyst estimates.

Investors liked what they heard about first-quarter results and O'Reilly's revised upward guidance for its full-year earnings. The stock was up more than US$27, or 12%, in early trading, at US$255 a share.

READ: LKQ shares fall double digits after disappointing first quarter

Greg Henslee, O’Reilly’s CEO, said the company saw a 3.4% increase in comparable-store sales, "which was above the midpoint of our guidance for the first quarter."

Looking ahead, O'Reilly said it expects comparable-store sales to increase in the range of 2% to 4% both in the second quarter and the full year.

O'Reilly is forecasting earnings per share in the second quarter in the range of US$3.95 to US$4.05, which is in line with the average estimate of US$4.02 a share among analysts surveyed by Yahoo Finance.

In addition, O'Reilly raised its earnings guidance for all of 2018 from the forecast it issued on 7 February 2018, when it reported year-end 2017 results. O'Reilly now expects earnings per share in the range of US$15.30 to US$15.40, up from the previous range of US$15.10 to US$15.20.

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