May 16, 2012
The average age of cars on American roads is nearing 11 years, with unemployment still high and the economic expansion sluggish.
As a result, analysts expect the specialty auto parts retailer to report a 34% first-quarter earnings per share gain to $1.81. Revenue is expected to rise 5.6% to just above $2 billion, in line with single-digit revenue growth in recent quarters.
One thing to look for is whether the maker of automotive after parts, accessories, batteries and other maintenance items can continue a recent trend of stronger profit growth. In first-quarter 2011, the company missed estimates, in Q2 it slightly topped views, and in Q3 and Q4 it reported profit well above forecasts.
Advance Auto Parts shares edged down 0.6% in afternoon trading Tuesday. The stock dived 6.9% on Monday as Cleveland Research downgraded it to neutral.
Advance Auto Parts’ share price rose steadily in the post-recession period. But it’s off about 10% for the month of May as it’s struggled along with larger rivals AutoZone (AZO) and O’Reilly Automotive (ORLY) — which is ranked No. 13 on the IBD Top 50 stocks list.
AutoZone will report results next Tuesday, May 22. The No. 1 parts retailer by sales is forecast to record an 18% increase in EPS, to $6.26. Sales are expected to hike 7.8% higher to $2.132 billion.