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(AZO) - Get AutoZone, Inc. Report

was skidding in Wednesday's premarket session despite reporting first-quarter earnings that were up 16% from a year ago and that easily beat the analyst consensus forecast.

The auto and auto-parts seller earned $121.7 million, or $1.35 a share, on revenue of $1.28 billion in the quarter ended Nov. 22, compared with earnings of $104.9 million, or $1.04 a share, on revenue of $1.22 billion a year ago. Same-store sales rose 1% in its retail segment and 17% in its commercial unit.

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Analysts were expecting earnings of $1.28 a share, according to Thomson First Call.

Some of the earnings performance came from expense initiatives, including a benefit of 10 cents a share related to "continued work with our vendors to minimize warranty exposure." It also lowered costs through the use of an "enriched 401(k) plan in place of a pension plan that was frozen in January of 2003."

The per-share earnings increase was also aided by share repurchases.

Most of the company's internals looked pretty good, however: Gross profit as a percentage of sales was up 2.7 percentage points year-over-year, while operating margin was 16.8% in the latest quarter compared with 15.5% a year ago. Return on invested capital for the trailing four quarters increased to 24.0% from 20.6% the previous year.

The shares were down $6.22, or 7%, to $85.12. The company is forecast to earn $6.41 in the year ending in August, leaving it with a forward price-to-earnings ratio of 13.2 after Wednesday morning's selloff.