UPDATE 2-LKQ Q1 results top Wall Street view; shares rise

(Recasts; adds analyst comments, share movement)

By Bhaswati Mukhopadhyay

BANGALORE, May 1 (Reuters) - LKQ Corp (LKQX.O: Quote, Profile, Research) posted better-than-expected quarterly results as revenue more than doubled and operating margins improved, and the automobile-parts recycler raised its 2008 earnings outlook, sending its shares up as much as 7 percent.

The operating margin improved by 90 basis points and, excluding restructuring expenses, by 110 basis points, said the company, which acquired car-parts maker Keystone Automotive Industries last year.

"This shows they are integrating Keystone, making much better usage of infrastructure and cutting costs, and this gives a nice incremental pop to the operating margin," said Barrington Research analyst Gary Prestopino.

Operating margins are expected to continue to improve throughout 2008, Prestopino, who has an "outperform" rating on the stock, said.

For the first quarter, net income nearly doubled to $30.9 million, or 22 cents a share, from the year-ago period. The company recorded $1.2 million of restructuring expenses during the quarter.

Analysts were expecting earnings of 20 cents a share, before special items, according to Reuters Estimates.

Revenue surged 109 percent to $491.9 million, topping analysts' expectation of $483.5 million.