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What: Shares of LKQ (NASDAQ:LKQ) dropped as much as 18% today after the auto parts supplier reported fourth-quarter earnings. Shares settled near a decrease of 13% in midday trading.
So what: Fourth-quarter revenue was up 27% to $1.68 billion, but fell just shy of the $1.69 billion analysts had forecast. On the bottom line, net income was up just 3% to $80.5 million, or $0.26 per share, falling below the projected $0.32 per share.
However, overall organic revenue growth landed at 7.1%, and parts and services revenue grew 8.7%. To top it off, management said it expects organic revenue growth of 6.5% to 9% this year.
Now what: These missed earnings expectations are a short-term blip for a company that looks to be performing well. Guidance calls for earnings of $1.36 to $1.46 per share in 2015, up from $1.26 in 2014, and gives investors a decent value with shares trading at 18 times earnings at the bottom end of guidance. That value and strong growth should push shares higher over the long term.
Travis Hoium has no position in any stocks mentioned. The Motley Fool recommends LKQ. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.