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O’Reilly Automotive reports lower net income and higher revenue in the first quarter.
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O’Reilly Automotive reports lower net income and higher revenue in the first quarter.

O'Reilly Auto shares jump on earnings report

Posted online

While O’Reilly Automotive Inc.'s (Nasdaq: ORLY) first-quarter earnings dropped amid the COVID-19 crisis, the company's shares jumped after the release of the report yesterday.

Shares this morning traded as high as $389.26 per share, a nearly 5% increase from yesterday's stock high of $371 per share. O’Reilly Automotive, which has a 52-week range of $251.52 to $454.31, has weathered the coronavirus pandemic better than most, as the company was marked as an essential business. Additionally, the auto parts retailer historically has been labeled as recession-proof due to consumers spending less on new vehicles and more on parts for their existing cars.

"O’Reilly Auto Parts is an essential supplier to the communities we serve, as a key resource provider ensuring consistent and effective transportation for a wide range of essential industries, health care providers, emergency personnel and consumers engaged in critical tasks, as well as meeting the automotive needs of everyday customers as they use their vehicles to meet basic needs, such as trips to the pharmacy or grocery store," O'Reilly Automotive co-President and CEO Greg Johnson said in a news release announcing the quarterly results.

During the first quarter, O'Reilly Automotive posted a 6.5% drop in net income to $300.4 million. Diluted share earnings dipped to $3.97 from $4.05 per share a year earlier. Quarterly sales, however, were up 2.7% to $2.5 million.

Johnson said the first quarter also was impacted by weather conditions.

“The first two months of the quarter were below our expectations as the mild weather was a headwind to demand in our business. But with the onset of spring weather at the beginning of March, sales performance strengthened," he said in the release. "However, we began to see the significant, negative impact of COVID-19 in the middle of March, as our customers became subject to stay-at-home orders issued across all of our market areas."

Comparable store sales fell 1.9% in the first quarter, compared with a 3.2% increase in the corresponding period of 2019.

As of March 31, O'Reilly Automotive had roughly $11 billion in assets. The company operates 5,512 stores in 47 U.S. states and 21 locations in Mexico, according to the release.

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