Source: Investing.com

On Thursday, LKQ Corporation reported second quarter results that fell short of analyst expectations and lowered its full-year outlook.

Shares of the automotive parts distributor slipped 11.52% in pre-market trading following the announcement.

The company posted adjusted earnings per share of $0.67, missing the analyst consensus of $0.71 by $0.04. Revenue declined 3.0% YoY to $3.41 billion, below the $3.49 billion estimate and down from $3.51 billion in the prior-year period. The company’s European segment fell short of expectations due to ERP implementation challenges in Germany, while North America returned to positive organic growth for the first time in nine quarters.

LKQ lowered its full-year 2026 adjusted EPS guidance to a range of $2.60 to $2.90, with a midpoint of $2.75 that sits well below the analyst consensus of $2.97. The company also reduced its organic revenue growth outlook to a range of -3.0% to -1.0%, down from the previous forecast of -0.5% to 1.5%.

“Our second-quarter performance reflected solid execution across our North America and Specialty segments,” said Justin Jude, President and Chief Executive Officer. “Europe fell short of expectations, with results affected by the ERP implementation in Germany.”

Parts and services revenue decreased 3.6%, including a 5.1% decline in organic revenue, partially offset by a 1.0% increase from foreign exchange rates. North America segment revenue rose 0.5% to $1.47 billion, driven by record alternative-parts utilization exceeding 40%. Europe segment revenue fell 9.6% to $1.46 billion, while Specialty segment revenue increased 5.0% to $488 million.

The company generated $111 million in operating cash flow and $60 million in free cash flow during the quarter. LKQ returned $129 million to shareholders through $52 million in share repurchases and $77 million in dividends.