LKQ reported third‑quarter revenue of $3.499 billion, up 1.3% from $3.453 billion in the same period last year. Total parts and services revenue grew 1.1%, driven by a 2.6% foreign‑exchange gain, offset by a 1.2% decline in organic revenue and a 0.3% net impact from acquisitions and divestitures. Net income was $178 million, or $0.69 per diluted share, down 2.8% from $187 million and $0.71 in 2024. Adjusted net income was $216 million, or $0.84 per share, down 2.3% from $226 million and $0.86 in 2024. Operating cash flow was $440 million and free cash flow $387 million for the quarter; nine‑month cash flow from operations was $733 million and free cash flow $573 million. The company returned $118 million to shareholders in the quarter through $40 million of share repurchases and $78 million in dividends, and $353 million for the nine‑month period. Debt fell to $4.2 billion, a 2.5× EBITDA leverage ratio.
The wholesale‑North America segment generated $1.8 billion in revenue, a 0.5% year‑over‑year decline, while the European segment grew 0.4% to $1.1 billion. The specialty segment posted its first positive organic growth in 14 quarters, with revenue up 9.3% to $0.6 billion. The divestiture of the Self‑Service segment, completed on September 30, removed $0.2 billion of revenue and $0.1 billion of operating income from the results, accounting for a $0.15 impact on the adjusted EPS guidance.
Management raised the 2025 adjusted diluted EPS guidance to a $3.00–$3.15 range, an increase of $0.07 in the midpoint. The guidance adjustment reflects the $0.15 impact of the Self‑Service divestiture and the company’s confidence in its cost‑control program, which has delivered $35 million in savings toward a $75 million target for 2025. Debt has been reduced by more than $600 million since the second quarter, strengthening the balance sheet and providing financial flexibility. Market share gains in North America offset a 6% decline in repairable claims, while European resilience and specialty growth support a positive outlook.
Revenue missed analyst consensus estimates of $3.52 billion, but adjusted earnings per share beat expectations of $0.83 by $0.01. The revenue shortfall is attributed to a 6% decline in North American repairable claims and supply‑chain constraints that limited the availability of certain high‑margin parts. The adjusted EPS beat is driven by the company’s disciplined cost‑control measures and the removal of the lower‑margin Self‑Service segment.
LKQ’s portfolio simplification strategy, completed with the sale of the Self‑Service segment to Pacific Avenue Capital Partners, has sharpened focus on core wholesale operations. The company’s cost‑control program has delivered significant savings, and the debt reduction enhances financial flexibility. These actions position LKQ for a stronger 2025 outlook, despite the challenging macro environment and competitive pressures in the repairable claims market.
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