Advance Auto Parts Earnings Preview

Advance Auto Parts

is scheduled to report third-quarter 2011 results today, November 9, after the closing bell. Its revenues have risen for three straight quarters, and it beat consensus per-share earnings in the previous quarter. No doubt investors will be hoping for more of the same. The consensus forecast calls for Advance Auto Parts to report earnings of $1.17 per share, which would be an increase from $1.03 in the same quarter of last year. That EPS estimate is unchanged over the past 90 days. Note that the company only fell short of consensus EPS estimates in one of the past six quarters, and then by three cents per share. Analysts also expect the company to post revenues of $1.5 billion, or a 3.8% increase from a year ago. Looking ahead to the current quarter, revenues are anticipated to increase 4.1% year over year. And for the full year, the forecast so far calls for revenues to be 4.0% higher, with per-share earnings up 15.4% from a year ago.

Advance Auto Parts operates more than 3,300 stores offering automotive aftermarket parts and accessories. Its Advance Auto Parts segment operates stores and also loans tools and offers services such as wiper installation, battery charging, electrical testing and oil recycling. Its Autopart International segment offers replacement parts to customers and warehouse distributors. The company was founded in 1929 and currently has a market cap of $4.9 billion. During the three months that ended in September, the company announced that its president had been elected to the board and would transition from his current position by the end of the year. And the company has added 130 new stores in the past year.

Advance Auto Parts a has P/E ratio of 15.5, which is less than the industry average. The 1.1 PEG ratio is in line with the industry average. The company has a dividend yield of 0.3% but its return on equity is 39.0%. EPS are expected to grow more than 11% over the next five years. Yet, the consensus recommendation of analysts is to hold the stock. The share price has risen more than 12% in the past month and is above the 50-day and 200-day moving averages. But it is still about 6% lower than the 52-week high. Over the past six months, the stock has outperformed competitor Pep Boys

and the broader markets, but underperformed AutoZone

and O'Reilly Automotive

.

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