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Out of the Gate: Advance Auto Parts rises



By AP
16 May 2008 @ 10:31 am ET

NEW YORK - Shares of Advance Auto Parts Inc. climbed Friday after the auto-parts retailer posted strong first-quarter results and began a new stock buyback.

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Late Thursday, Advance said its profit grew 8 percent and revenue increased by 4 percent in the quarter. Both totals surpassed Wall Street's expectations, and the Roanoke, Va., company approved a repurchase of $250 million worth of stock.

The company has bought back 11.6 million share since August, for a total of $395 million. Advance currently has 94.5 million shares outstanding.

In morning trading, Advance shares rose $3.53, or 10.2 percent, to $38.17.

Wachovia analyst Peter Benedict said the results are "a very good start to the year," as Advance posted strong gross margins. He added that the company reported strong results in several areas important to a turnaround, including costs per store, spending per employee and its return on spending.

Goldman Sachs analyst Matthew Fassler praised President and Chief Executive Darren Jackson as "a first class finance executive." Fassler wrote that financial improvements at Advance are leading to profit growth even though changes in the company's operations have not kicked in yet.

Jackson is a former executive vice president at Best Buy Co. He was named CEO of Advance Auto Parts on Nov. 29, replacing interim president and CEO John Brouillard. Jackson had been on Advance's board of directors since 2004.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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