Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=215426
Story Retrieval Date: 10/25/2014 8:01:46 PM CST

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Advance Auto beats profit forecasts despite winter’s mild temps

by Rhyan Kronzer
Feb 7, 2013


advance auto parts

Rhyan Kronzer/MEDILL

Advance Auto Parts Inc. has seen steady growth in net income over the past four years with a slight dip in the 2012 fiscal year.

The unseasonably warm winter has taken a toll on auto parts retailers across the U.S. –- bad weather tends to cause more part failures -- but Virginia-based Advance Auto Parts Inc. has managed to ride out those pressures in fiscal 2012.

Advance Auto shares strengthened Thursday after the nation’s second-largest auto parts retailer reported fiscal fourth-quarter earnings that beat Wall Street forecasts.

In the fourth quarter ended Dec. 29, net income dropped by 2 percent to $65.1 million, or 88 centers per diluted share, as compared to $66.4 million, or 90 cents per diluted share, in the year ago period.

Sales remained relatively flat at $1.33 billion, unchanged from year ago quarter.

“Overall, fiscal 2012 was a challenging environment, which is reflected in our results. Yet we achieved many key milestones that position us for a strong future,” stated President and CEO, Darren Jackson, in a press release.

The latest per-share earnings still trumped by 12 cents the 76 cents per share predicted by analysts surveyed by Yahoo Finance.

Company officials are confident that they positioned for increased sales in fiscal 2013 despite shortfalls this year.

“Our decision to maintain our investment profile through the course of the year is driven by our confidence in long-term industry fundamentals and provides us with a strong foundation to build upon as we head into fiscal 2013,” Jackson said.

Company guidance for fiscal 2013 expects earnings per share to fall between $5.45 and $5.60 with their recent acquisition of BWP Distributors adding roughly $170 million $180 million in revenue.

Guidance from Advance Auto is, “Below our estimate despite comments that comparable sales trends continue to improve sequentially,” Stifel, Nicolaus & Co. Inc. Managing Director David Schick said in a note to investors.

For full-year 2012, Advance Auto earned $387.7 million, or $5.22 per diluted share, down 1.8 percent from $394.7 million, or $5.11 per diluted share, in the prior year. Full-year sales rose by 0.6 percent to $6.21 billion from $6.17 billion in 2011.

Advance Auto shares rose $4.22, or 5.8 percent, to close at $77.12 Thursday.