On August 16,
O'Reilly Automotive Inc.
) announced its plan for an offering of $300 million senior
subordinated notes due 2022. The company subsequently declared the
pricing of $300 million of 3.800% senior subordinated notes at
99.627% of their face value.
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The proceeds from the offering will be used for general corporate
purposes, incorporating a hike in the working capital along with
share repurchases, repayment of debt and investment in other
business opportunities. The proceeds will also be used for the
payment of fees and expenses related to the offering.
In September 2011, the company offered $300 million of unsecured
4.625% senior notes due 2021. The 4.625% senior notes were priced
at 99.826% of their face value with maturity on September 15, 2021.
The proceeds from this offering were used for the payment of fees
and expenses related to the offering, while the remaining
amount was used for general corporate purposes, primarily share
O'Reilly registered a 20% increase in its earnings per share to
$1.15 in the second quarter of 2012, compared to 96 cents in the
prior-year quarter. The result beat the Zacks Consensus Estimate by
a penny. Net income increased 9% to $146 million from $134 million
in the second quarter of 2011.Total revenues rose 6% to $1.56
billion, essentially in line with the Zacks Consensus Estimate.
O'Reilly is the third largest retailer of automotive aftermarket
parts, tools, supplies, equipment and accessories in the U.S. The
company sells an extensive line of products consisting of new and
remanufactured automotive hard parts (such as mufflers, brakes, and
shock absorbers), maintenance items, accessories, a complete range
of auto body paint and related materials, automotive tools, and
professional service equipment. Its main competitors include
Advance Auto Parts Inc.
Currently, O'Reilly retains a Zacks #3 Rank, which translates into
a short-term (1 to 3 months) Hold rating. We have a long-term (more
than 6 months) Neutral recommendation on the stock.