O'Reilly (ORLY) To Report Q1 Earnings: What's In The Cards?

O'Reilly Automotive Inc. (NASDAQ:ORLY) is set to release first-quarter fiscal 2018 earnings after the market closes on Apr 25. Last quarter, the company delivered a positive surprise of 4.3%. In the trailing four quarters, it surpassed expectations thrice and missed once, with an average beat of 0.93%.

In the last six months, shares of O'Reilly Automotive have outperformed the industry it belongs to. The stock has advanced 8.4% compared with the industry’s gain of 2.8% during the period.

Let’s see, how things are shaping up for this announcement.

O'Reilly Automotive, Inc. Price and EPS Surprise

O'Reilly Automotive, Inc. Price and EPS Surprise | O'Reilly Automotive, Inc. Quote

Factors to Consider

For first-quarter fiscal 2018, O’Reilly Automotive projects diluted earnings per share of $3.55-$3.65. It expects consolidated comparable store sales to climb 2-4%.

Also, for fiscal 2018, O’Reilly anticipates total revenues of $9.4-$9.6 billion while earnings per share are anticipated to be $15.1-$15.2. The company forecasts a consolidated comparable store sales increase of 2-4% during the year. The gross margin view lies at 52.5-53% while the operating margin outlook is estimated at 18.5-19%.

The company is also poised to benefit from store openings in the existing markets as well as the new and contiguous ones. During the fourth quarter of fiscal 2017, O’Reilly opened 36 stores across the country and closed one.

For the soon-to-be-released quarter, the Zacks Consensus Estimate for sales per weighted-average store stands at $450,000, up from the actual figure of $440,000 for fourth-quarter 2017. Also, at the end of Mar 31, 2018, the Zacks Consensus Estimate for the total store count was 5,069 in comparison with 5,019 recorded on Dec 31, 2017.

Earnings Whispers

Our proven model does not conclusively show an earnings beat for O'Reilly Automotive this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below.

Zacks ESP: Earnings ESP for O'Reilly Automotive is -1.10% as the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $3.56 and $3.60, respectively. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: O'Reilly Automotive carries a Zacks Rank #3, which increases the predictive power of ESP. However, its negative Earnings ESP makes surprise prediction difficult.

We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a few stocks worth considering from the same space, with the right combination of elements to outpace earnings estimates this time around:

BorgWarner Inc. (NYSE:BWA) has an Earnings ESP of +1.33% and a Zacks Rank #2. Its first-quarter 2018 results are expected to be released on Apr 26. You can see the complete list of today’s Zacks #1 Rank stocks here.

Autoliv, Inc. (NYSE:ALV) has an Earnings ESP of +1.74% and a Zacks Rank of 3. It is expected to report first-quarter 2018 results on Apr 27.

Cummins Inc. (NYSE:CMI) has an Earnings ESP of +0.49% and is a #2 Ranked player. Its first-quarter 2018 results are slated to be announced on May 1.

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