NEW YORK (TheStreet) -- Shares of AutoZone Inc (AZO) finished the regular trading session in the red, slightly lower by 0.11% to $688.43 on Tuesday, after the car parts company reported mixed fiscal third quarter earnings results earlier this morning.
On CNBC's Cramer's Stop Trading segment this morning, TheStreet's Jim Cramer, Portfolio Manager of the Action Alerts PLUS Charitable Trust Portfolio said to watch the auto parts company's shares because they could get a boost from the company's consistent buybacks.
Cramer said the company has been "one of the great performers" in the auto service and parts sector.
For the first quarter, the company earned $9.57 per share on revenue of $2.49 billion.
Analysts were expecting a profit of $9.52 per share on revenue of $2.5 billion, according to Thomson Reuters.
In the same quarter of last year, AutoZone reported earnings of $8.46 per share on revenue of $2.34 billion.
The automotive replacement parts retailer reported domestic same-store sales gained 2.3% for the quarter.
Its gross profit, as a percentage of sales, widened to 52.3% from 52% a year ago.
Operating expenses, as a percentage of sales, rose slightly to 31.6% from 31.5%.
Inventory increased 10.7% year-over-year.
"While we have continued to strategically invest in our business in order to support our growth, we remain committed to our disciplined approach to growing operating earnings and utilizing our capital effectively," said AutoZone chairman, president, and CEO Bill Rhodes in a statement.
During the quarter, AutoZone repurchased 763,000 shares for $515 million, which is more compared to what the company bought back in the first half of the year.
Memphis, Tenn.-based AutoZone is a retailer and a distributor of automotive replacement parts and accessories.
The company operates stores that carry a product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products.
Insight from TheStreet's Research Team:
Michael Khouw commented on AutoZone in a recent post on ActionAlertsOPTIONS.com. During the most recent weekly roundup, this is what Khouw had to say about the stock:
What to Watch: There are a lot of positive catalysts for the company, such as lower gas prices, rising incomes and confidence, increases in miles driven and average vehicle age. AZO earnings have grown in double digits for 34 consecutive quarters. Consensus expectations are for another beat for the second quarter, driven by flourishing revenues and higher gross margin from both the retail and commercial businesses, together with increasing store count and regular share buybacks. There is a lot of love for AZO as analysts took up their ratings and price targets last quarter, so the company is going to have to print a super-clean report and guide well.
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Separately, TheStreet Ratings team rates AUTOZONE INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate AUTOZONE INC (AZO) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow."
You can view the full analysis from the report here: AZO Ratings Report