Markets
AAP

Advance Auto Parts (AAP) Q4 Earnings: What's in the Cards?

Advance Auto Parts Inc.AAP is expected to report fourth-quarter fiscal 2016 results before the market opens on Feb 21.

In the last quarter, the company posted a positive earnings surprise of 0.58%. Let's see how things are shaping up prior to this announcement.

Advance Auto Parts Inc Price and EPS Surprise

Advance Auto Parts Inc Price and EPS Surprise | Advance Auto Parts Inc Quote

Factors to Consider

Advance Auto Parts drives profits through its continued focus on store expansion. During fiscal 2015, the company opened 121 stores. In the first nine months of fiscal 2016, the company opened 48 stores. The increase in store count ensures higher availability of parts to customers, thereby leading to increased sales volume. The company is also focused on sales execution, availability and delivery of products to generate positive comparable sales performance.

Advance Auto Parts has also undertaken cost-reduction initiatives. The company's selling, general and administrative expenses have been declining. In the first nine months of fiscal 2016, the company saw costs fall to $2.67 billion or 35.7% of sales from $2.79 billion or 36.2% in the prior-year period.

Advance Auto Parts has outperformed the Zacks categorized Retail/Wholesale-Auto Parts industry over the past six months. The company's shares have gained 2.6% over this period, as against a 0.7% decline recorded by the industry.

Earnings Whispers

Our proven model does not conclusively show that Advance Auto Parts is likely to beat earnings 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: The Earnings ESP represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate. Advance Auto Parts' Earnings ESP is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.09. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: Advance Auto Parts carries a Zacks Rank #2. Though a Zacks Rank #2 increases the predictive power of ESP, the company's ESP of 0.00% makes surprise prediction difficult.

Concurrently, 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 some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Spartan Motors, Inc. SPAR has an Earnings ESP of +50% and sports a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

Visteon Corporation VC has an Earnings ESP of +5.93% and a Zacks Rank #3.

WABCO Holdings Inc. WBC has an Earnings ESP of +2.08% and a Zacks Rank #3.

Just Released - Driverless Cars: Your Roadmap to Mega-Profits Today

In this latest Special Report, Zacks' Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making - autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Advance Auto Parts Inc (AAP): Free Stock Analysis Report

Visteon Corporation (VC): Free Stock Analysis Report

Wabco Holdings Inc. (WBC): Free Stock Analysis Report

Spartan Motors, Inc. (SPAR): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

AAP VC SHYF

Other Topics

Earnings Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More