Advanced Auto stock surges on earnings

CHICAGO (Reuters) - Shares of Advance Auto Parts Inc (AAP.N: Quote, Profile, Research) surged nearly 13 percent on Friday after the company, the country's second largest vehicle parts retailer, reported better-than-expected earnings.

After the closing bell on Thursday, the Roanoke, Virginia-based company said its first-quarter earnings rose nearly 8 percent to $82.1 million, or 86 cents a share, from $76.1 million, or 71 cents a share, last year.

Wall Street had expected the company to report earnings of 78 cents a share. Matthew J. Fassler, an analyst at Goldman Sachs, called the results a "sharp, clean beat."

Fassler and others attributed much of the beat to Darren Jackson, the company's new CEO, who was hired away from Best Buy Co Inc (BBY.N: Quote, Profile, Research) late last year to turn Advanced Auto around and has quickly improved margins at the company.

Gary Balter, an analyst at Credit Suisse, also gave much of the credit for the first-quarter beat to Jackson. But he warned against getting "overly excited" by the results, saying Advanced Auto's prospects in the coming quarters would be determined more by larger economic factors than management execution.

"The largest driver of results for AAP over the near-term may be the macro environment," Balter said, "with soaring gas and food prices pushing the core low-end customer to drive less and spend less on fixing their cars."

Oil prices hit a new all-time high on Friday of $127.82 a barrel on the New York Mercantile Exchange, sending the broader stock market lower. And analysts at Goldman Sachs, the most active investment bank in energy markets, sharply raised their forecast for oil prices in the second half of this year, citing tight supply.

The bank expects U.S. crude CLc1 to average $141 a barrel in the second half of 2008, up from a previous projection of $107. Goldman also forecasts prices will rise further next year to average $148.

The company's stock rose $4.46, or 12.9 percent, to $39.10 on Friday on the New York Stock Exchange.

(Reporting by James Kelleher, editing by Phil Berlowitz)