Image: LKQ.

The auto-parts business is an important part of the consumer and industrial economy, as millions of vehicle owners have to maintain them and replace worn parts on a regular basis. LKQ (NASDAQ:LKQ) provides consumers with an alternative to conventional parts suppliers, offering specialty parts for repairs or substitutions that are cheaper than what you'd get from original-equipment manufacturers. Yet despite recent success in the industry broadly, players like Delphi Automotive (NYSE:DLPH) have warned that future results might not be as favorable as what investors have gotten used to seeing, with weakness in certain areas of the world posing competitive threats. Coming into Thursday's third-quarter financial report, LKQ investors were looking for modest growth in its fundamentals, and the company generally met those expectations. Let's take a closer look at LKQ to see what its most recent quarter looked like.

LKQ stays in gear
LKQ's third-quarter results were mixed but generally in line with investor expectations. Sales climbed 6.4% to $1.83 billion, falling just short of the $1.84 billion consensus estimate among investors. On the earnings front, though, net income climbed almost 11% to $101.3 million, and after allowing for restructuring and acquisition-related costs, adjusted earnings of $0.34 per share were a penny better than most investors were looking to see.

A closer look at LKQ's segments shows widespread gains throughout most of the company. Sales of specialty parts were saw the biggest gains, rising 41% primarily on the increase in sales resulting from acquisitions. European sales rose only 3%, but the segment took the biggest hit from the strong dollar, costing it 10 percentage points of potential growth. The North American segment enjoyed sales gains of almost 8% year-over-year, joining its international counterparts in producing both organic and acquisition-related revenue gains. The Other segment took a 30% sales hit, pulling down overall revenue by about $55 million from the year-ago quarter.

CEO Robert Wagman pointed to LKQ's resiliency in the face of tough conditions. "I am particularly pleased with the 14.9% revenue growth in parts and services on a constant currency basis," Wagman said. The CEO noted that lower scrap prices hurt LKQ's results in combination with currency impacts, making the outperformance even more impressive.

Can LKQ keep driving forward?
Those tough conditions led LKQ to update its full-year 2015 guidance, with some moves being favorable and others unfavorable. The company cut its projections for organic revenue growth in the parts and services segments, narrowing its estimate to 7% to 7.5%, which was at the lower end of its previous range. Adjusted net income should come in between $428 million and $442 million, which narrows both ends of the previous range by $3 million, and adjusted earnings of $1.39 to $1.44 per share reflect single-penny changes in a narrower range. LKQ also said it would spend less on capital expenditures, cutting by $15 million to $30 million to a new range of $135 million to $150 million. On a positive note, though, operating cash flow should come in $75 million to $100 million better than originally expected, with the new range set between $525 million and $550 million.

LKQ's efforts to expand have been paying off, but adverse conditions in the industry could clamp down on growth. Delphi Automotive's recent results weren't terrible, but they did include year-over-year declines in revenue that pointed toward sluggishness in key areas of the auto-parts market. With its alternative focus, LKQ doesn't overlap with Delphi Automotive's target audience entirely, but LKQ is still potentially vulnerable to the same overall industry conditions that threaten Delphi's future growth.

Looking forward, LKQ has found itself a solid niche in an industry with plenty of long-term growth potential. By maintaining its focus on expansion, LKQ will put itself in a strong position to benefit when conditions across the globe start to improve.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and 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.