O’Reilly Automotive Inc. Earnings: Revenue Increase Helps Margin, Net Income Climbs

S&P 500 (NYSE:SPY) component O’Reilly Automotive Inc. (NASDAQ:ORLY) reported net income above Wall Street’s expectations for the fourth quarter. O’Reilly Automotive offers automotive aftermarket parts, tools, supplies, and accessories to individual customers and professional installers.

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O’Reilly Automotive Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the auto parts store rose to $123 million (94 cents per share) vs. $105.8 million (74 cents per share) in the same quarter a year earlier. This marks a rise of 16.3% from the year earlier quarter.

Revenue: Rose 6.2% to $1.39 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: O’Reilly Automotive Inc. reported adjusted net income of 93 cents per share. By that measure, the company beat the mean estimate of 85 cents per share. Analysts were expecting revenue of $1.41 billion.

Quoting Management: “We are pleased to report another quarter of solid financial results,” stated Greg Henslee, CEO and Co-President of the Company. “As a result of our continued efforts to profitably grow sales, along with our culture of strict expense control, we generated a fourth quarter increase in comparable store sales of 3.3% while also increasing our adjusted operating margin to 14.7%, a 214 basis-point improvement over the fourth quarter last year. For the year, we generated a comparable store sales increase of 4.6%, and we expect to continue these strong results in 2012 with comparable store sales guidance of 3% to 6%. For the full year, we generated a record 14.9% adjusted operating margin, and we expect to achieve an operating margin of 15% in 2012, a year earlier than our 2013 goal. Our continued success is the direct result of our Team Members’ commitment to providing the highest level of service to our customers every day. I want to thank Team O’Reilly for your dedication and hard work and congratulate you on another great year.”

Key Stats:

The company has now seen net income rise in three straight quarters. In the third quarter, net income rose 27.4% and in the second quarter, the figure rose 34.3%.

Revenue has risen the past four quarters. Revenue increased 7.7% to $1.54 billion in the third quarter. The figure rose 7.1% in the second quarter from the year earlier and climbed 8% in the first quarter from the year-ago quarter.

The company has now beaten estimates the last two quarters. In the third quarter, it topped expectations with net income of $1.10 versus a mean estimate of net income of $1 per share.

Looking Forward: Next quarter’s results are expected to be more favorable for the company. Over the past sixty days, the average estimate for the first quarter of the next fiscal year has reached $1 per share, up from 99 cents. The average estimate for the fiscal year is $3.74 per share, a rise from $3.73 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com