O’Reilly Automotive (ORLY) showed a 55% rise in profits to $97 million in the first quarter of 2010 from $63 million in the same period of 2009. This was equivalent to a 52% increase in profit to 70 cents per share from 46 cents per share a year ago. With this, the company outdid the Zacks Consensus Estimate of 59 cents per share and its own guidance of earnings between 56 cents–60 cents per share. 

The company attributed the results to the impressive consolidated comparable store sales, led by its dual market strategy, and strong distribution network and cost management actions. 

Sales in the first quarter grew 10% to $1.28 billion. Consolidated comparable store sales for stores open for at least one year rose 6.9%, an improvement from an increase of 5.7% in the first quarter of 2009. Gross profit leaped to $618 million or 48.3% of sales from $543 million or 46.6% of sales a year ago. 

O’Reilly opened 49 new stores during the quarter. The company aims to open a total of 150 stores in 2010.
 
Financial Position 

O’Reilly had cash and cash equivalents of $30 million as of March 31, 2010, a decline from $37 million from the year-ago period. Long-term debt was $702.5 million as of that date. Long-term debt to capitalization ratio stood at 20%. 

In the quarter, net cash flow from operations improved to $171 million from $86.5 million in the previous year. This was primarily attributed to improved profits, an increase in deferred income taxes and a decline in inventory. Capital expenditures reduced to $91 million from $151 million in the first quarter of 2009. 

Guidance Raised 

O’Reilly has projected earnings per share in the range of 70 cents–74 cents and consolidated comparable store sales to increase in the range of 4% to 6% for the second quarter of 2010. 

For the full year 2010, the company anticipates earnings per share in the range of $2.65 to $2.75 and consolidated comparable store sales to increase in the range of 4% to 6%. This is higher than the previous guidance of earnings per share range of $2.50–$2.56 and a rise in consolidated comparable store sales of 3% to 5%.
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