LKQ Corporation reported its financial results for the third quarter and the nine months ended September 30, 2024, showing a slight increase in revenue but a decline in profitability compared to the previous fiscal period.
For the three months ended September 30, 2024, LKQ generated total revenue of $3,584 million, a marginal increase of 0.5% from $3,568 million in the same period of 2023. For the nine months, revenue rose to $10,998 million, up 6.1% from $10,365 million year-over-year. The growth was driven by a 3.1% increase from acquisitions and a 0.4% increase from foreign exchange fluctuations, despite a 2.8% decrease in organic parts and services revenue.
Gross margin for the third quarter was $1,393 million, slightly up from $1,390 million in the prior year, while for the nine months, it increased to $4,286 million from $4,176 million. However, operating income for the third quarter was $310 million, a slight increase from $308 million, but for the nine months, it decreased to $928 million from $1,080 million.
Net income for the third quarter was $192 million, down from $208 million in 2023, and for the nine months, it fell to $536 million from $760 million. Basic earnings per share for the third quarter were $0.73, down from $0.77, and for the nine months, it decreased to $2.02 from $2.84.
The company undertook several strategic initiatives, including the completion of acquisitions of six businesses in North America and two in Europe during the nine months, although these were not material to financial results. The acquisition of Uni-Select, completed in August 2023 for approximately $2.1 billion, contributed to revenue growth but also impacted gross margins due to a shift in product mix towards lower-margin lines.
LKQ initiated a 2024 Global Restructuring Plan aimed at enhancing profitability through exiting non-strategic businesses and reducing costs, with an estimated total incurred cost of $100 million to $120 million expected to be substantially complete by the end of 2025. The company also divested operations in Slovenia, Poland, and Bosnia, leading to impairment charges.
As of September 30, 2024, total assets increased to $15,466 million from $15,079 million at the end of 2023, while total debt rose to $4,371 million from $4,281 million. Cash and cash equivalents increased to $353 million from $299 million. The effective income tax rate for the nine months was 28.8%, up from 25.9% in the prior year, primarily due to unfavorable impacts from discrete items related to the restructuring plan.
Overall, while LKQ Corporation experienced revenue growth, profitability metrics reflected challenges, including increased costs and strategic restructuring efforts.
About LKQ CORP
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