Wednesday, December 7, 2011

AutoZone Inc Earnings Cheat Sheet: Fifth straight Quarter of Expanding Margins, Net Income Climbs

S&P 500 (NYSE:SPY) component AutoZone Inc (NYSE:AZO) reported net income above Wall Street’s expectations for the first quarter. AutoZone is a specialty retailer of automotive replacement parts and accessories, offering an extensive line for cars, sport utility vehicles, vans, and light trucks.

AutoZone Inc Earnings Cheat Sheet for the First Quarter

Results: Net income for the auto parts store rose to $191.1 million ($4.68 per share) vs. $172.1 million ($3.77 per share) in the same quarter a year earlier. This marks a rise of 11.1% from the year earlier quarter.

Revenue: Rose 7.4% to $1.92 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: AZO beat the mean analyst estimate of $4.45 per share. Analysts were expecting revenue of $1.89 billion.

Quoting Management: After three years of impressive financial performance, we are pleased to begin fiscal 2012 with strong quarterly results. This past quarter marked our twelfth consecutive quarter of 20% growth in earnings per share and our twenty-first consecutive quarter of double digit growth.Our 4.6% same store sales and 22.6% growth in Commercial sales are both testaments to our organization’s efforts to continually improve and further validation of our strategies.We continue to execute on our ’1Team Driving our Future’ operating theme for 2012.Our financial success continues to be the direct result of the tremendous contributions of our more than 65,000 dedicated AutoZoners, and I am convinced it is their dedication to helping our customers that differentiates us from our competition and drives our successes.”

Key Stats:

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 0.4 percentage point to 51.1% from the year earlier quarter. Over that span, margins h! ave grow n on average 0.6 percentage point per quarter on a year-over-year basis.

The company has now seen net income rise in three straight quarters. In the fourth quarter of the last fiscal year, net income rose 12.1% and in the third quarter of the last fiscal year, the figure rose 12.1%.

Revenue has risen the past four quarters. Revenue increased 8.1% to $2.64 billion in the fourth quarter of the last fiscal year. The figure rose 8.6% in the third quarter of the last fiscal year from the year earlier and climbed 10.3% in the second quarter of the last fiscal year from the year-ago quarter.

The company has now beaten estimates the last two quarters. In the fourth quarter of the last fiscal year, it topped expectations with net income of $7.18 versus a mean estimate of net income of $6.98 per share.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the second quarter is $3.91 per share, up from $3.87 ninety days ago. For the fiscal year, the average estimate has moved up from $22.12 a share to $22.55 over the last ninety days.

Competitors to Watch: Advance Auto Parts, Inc. (NYSE:AAP), O’Reilly Automotive, Inc. (NASDAQ:ORLY), The Pep Boys – Manny, Moe & Jack (NYSE:PBY), U.S. Auto Parts Network, Inc. (NASDAQ:PRTS), General Motors Company (NYSE:GM), Toyota Motor Corp. (NYSE:TM), Honda Montor Co. Ltd. (NYSE:HMC), Ford Motor Company (NYSE:F), CarMax (NYSE:KMX), Tesla Motors Inc (NASDAQ:TSLA), Tata Motors Limited (NYSE:TTM), and Navistar Intl. Corp. (NYSE:NAV).

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

 

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