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Why Shares of Advance Auto Parts Are up 11% Wednesday

By Daniel Miller - Updated Feb 21, 2018 at 12:59PM

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Despite declining profits compared to the prior year, the company's stock is up today after topping Wall Street's estimates.

What happened?

Shares of Advance Auto Parts (AAP 2.50%), a leading aftermarket automotive parts retailer, are up 11% as of 12:00 p.m. EST after the company released fourth-quarter earnings that topped estimates despite declining year over year.

So what

Advance Auto Parts posted revenue of $2.04 billion during the fourthquarter, which topped analysts' estimates of $2.02 billion. Its bottom line adjusted for one-time items checked in at $0.77 per share and also topped analysts' estimates calling for $0.65 per share. 

Tom Greco, President and Chief Executive Officer, commented in a press release:

As we enter the second year of our transformation plan, we still have a lot that we want to accomplish. We remain steadfast in our commitment to strengthen our customer value proposition, deliver market share improvement and execute our productivity agenda to drive margin expansion.

Aisle of an auto parts store.

Image source: Getty Images.

Now what

This is simply another step on the road to Advance's recovery, a company that has generally lagged its peers in profitability, and if management can continue to close the gap with competitors, investors will be rewarded with more positive quarterly performances such as this -- although it's easier said than done.

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