The share price of Advance Auto Parts (AAP.US), a leading provider of used car parts and service in the U.S., fell 15% today after opening the session on Wall Street due to weak third-quarter results for the year:
Earnings per share (EPS): $2.84 vs. $3.32 forecast
Revenue: $2.6 billion vs. $2.64 billion forecasts
Company estimates:
Annual revenue estimates: $11 billion to $11.2 billion, vs. $11.1 billion forecasts, and $12.75 to $13.25 billion previously
Annual EPS estimates: $12.60 - $12.80 vs. $13.02 forecasts.
Advance Auto Parts reported net sales of $2.6 billion, up slightly year-over-year, in line with Wall Street analysts' expectations. Same-store sales fell 0.7%, slightly beating analysts' estimates:
"Revenues and margins performed largely in line with expectations, but higher-than-expected operating expenses and currency changes resulted in missed EPS (...) Surprisingly, the results were worse than expected and will likely cause investors to be more critical of future forecasts. We maintain our view that higher cost control and predictability is needed to help valuations." - RBC Capital analysts commented on the results.
- The company's CEO, Tom Greco, stressed that the underlying factors generating demand for the company's services, i.e. interest in used cars, are positive, and that the industry is resilient to the deteriorating macro outlook. However, he pointed out that the company is not satisfied with the profits it is recording while pursuing its long-term growth strategy. He also announced that management will make efforts to accelerate growth.
AAP.US shares, D1 interval. Declines after the opening were halted at the level from the lows at the end of September this year, at $152. Bulls are likely to try to rise again from this area to the SMA50, which runs around $173. Source: xStation5
