Piper Jaffray Gives Earnings Preview On U.S Auto Parts

U.S. Auto PartsPRTS will report December quarter earnings Feb. 28 after market close. It expects an in-line quarter with $80.1 million revenues and $0.00 EPS, essentially in line with the Street's $80.4 million and ($0.01) estimates. Looking out through FY11, we expect organic sales growth to decelerate to +15% y/y from +25% in FY10, while margins could be pressured by increasing gas prices (freight costs: 12-14% of sales) and integration expenses. U.S. Auto Parts is in the midst of integrating the J.C. Whitney business, which we expect to be completed in the September quarter. In November, concerns arose around eBay's efforts to remove duplicate auto parts listings on its site, which could have negatively impacted U.S. Auto Parts' sales relative to other sellers on eBay. Partially offsetting this, Piper notes that auto parts & accessories GMV growth sold on eBay accelerated to +8% y/y in the Dec. qtr from +3% y/y in the Sept. quarter despite a more difficult y/y comparison. Piper Jaffray has an $8 PT and Neutral rating on PRTS PRTS closed Friday at $8.35