On Tuesday, AutoZone (NYSE:AZO) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

AutoZone has benefited greatly from the trend among car owners to hang onto their used vehicles longer, accepting the higher maintenance costs involved with keeping older cars running rather than having to face sticker shock from a new-vehicle purchase. As new car sales start to rebound, though, will the auto-parts retailer start to see its business go in the other direction? Let's take an early look at what's been happening with AutoZone over the past quarter and what we're likely to see in its quarterly report.

Stats on AutoZone

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$2.22 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

How will AutoZone's earnings fare this quarter?
Analysts have very narrowly cut their estimates on AutoZone's earnings in recent months, with a $0.03 per share reduction in its just-ended quarter and an even smaller $0.02 per share drop for the full 2013 fiscal year. The stock, though, has continued to rise, with an 8% gain since mid-February.

Like many auto-parts retailers, AutoZone has traditionally seen its fortunes linked to the state of the economy, as better economic times lead more car owners to buy new vehicles rather than spending money on replacement parts. With auto sales having rebounded lately, that trend played out in AutoZone's last quarter, in which the company posted same-store sales declines of 1.8%.

But there are signs that the prospects for AutoZone might be improving. The company blamed delayed tax refunds for part of its challenges last quarter, raising the possibility that anticipated revenue might simply shift into the just-ended quarter. Given AutoZone's focus on selling to do-it-yourself car owners, its sensitivity to personal financial issues is higher than many of its peers that focus more on the commercial parts market.

Still, competition is looking fiercer than ever. O'Reilly Automotive (NASDAQ:ORLY) reported recently that it has expanded its sales to auto-repair professionals, and despite a modest 0.6% jump in same-store sales for the company, it expects better results in the current quarter. Even though AutoZone has better margins, retailers Advance Auto Parts (NYSE:AAP) and Pep Boys (NYSE:PBY) have each taken steps to implement cost-cutting measures and reduce their overhead in order to bolster their own profitability.

In AutoZone's report, look for management to explain whether delayed tax refunds turned into better sales for the company this quarter. If the company doesn't post the improvement that O'Reilly saw, it could be a warning sign that AutoZone's recent share-price gains could reverse themselves in the near future.

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Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool owns shares of O'Reilly Automotive. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.