LKQ LKQ 2025 Q2 Earnings Preview Downside Risk Amid Expected EPS Decline

Forward-Looking Analysis
LKQ's upcoming Q2 2025 earnings report is anticipated to show earnings of $0.93 per share, reflecting a 5.1% decline compared to the same period last year. Analysts expect the full-year adjusted EPS to fall within the range of $3.40 to $3.70, aligning with the consensus estimate of $3.60. Organic revenue growth for parts and services is projected to be modest, between 0% and 2% year-over-year. The company’s earnings are forecast to grow 12.32% next year, increasing from $3.57 to $4.01 per share. Analysts predict a steady revenue growth rate of 2.3% per annum, with EPS expected to rise by 12.6% annually. These figures suggest a cautious outlook for Q2, with potential pressures on revenue and earnings.

Historical Performance Review
In Q1 2025, LKQ reported revenue of $3.46 billion, down from $3.7 billion in Q1 2024, marking a year-over-year decrease of 6.5%. The company's net income reached $169 million, and EPS stood at $0.65, showing a slight increase from the previous year's quarter. Gross profit for the period was $1.38 billion.

Additional News
Recently, LKQ shares saw an increase of over 2% following a strong Q4 performance, exceeding earnings expectations despite a year-over-year revenue decline. The company is focusing on maintaining its operational efficiency and is committed to organic growth strategies. LKQ’s full-year 2025 outlook remains cautious, with expectations for modest growth in parts and services, while also managing its effective global tax rate. Additionally, analysts forecast a return on equity of 14.1% over the next three years, reinforcing a stable financial position despite recent revenue challenges.

Summary & Outlook
LKQ's financial health shows resilience, with a cautious outlook for Q2 2025 earnings given the expected EPS decline. The company’s strategic focus on organic growth and operational efficiency serves as a growth catalyst, while the modest revenue expectations present a risk. Despite the short-term pressures, the long-term prospects remain neutral, supported by projected EPS growth and stable return on equity. Overall, LKQ demonstrates a balanced approach, with potential for future improvement as market conditions stabilize.