(Adds comments from CEO interview, company conference call)
By Susan Kelly
CHICAGO, Sept 25 (Reuters) - AutoZone Inc. , the nation's largest automotive parts retailer, posted sharply higher quarterly earnings on Wednesday as more Americans performed repairs on their aging cars in a soft economy.
AutoZone, which sells parts and accessories through more than 3,000 stores, reported results that far exceeded Wall Street's expectations.
The shares climbed 6.4 percent on the New York Stock Exchange Wednesday afternoon, driving other auto store stocks higher. Advance Auto Parts Inc. rose 5.3 percent and O'Reilly Automotive Inc. gained 4.6 percent.
AutoZone said net income in the fourth quarter ended Aug. 31 rose to $178 million, or $1.73 a share, from $26.5 million, or 24 cents, a year ago. The company earned $1.07 a share in the prior-year quarter before restructuring and other charges.
The results were well above the average analyst estimate of $1.41 a share, according to Thomson First Call.
"It's a fairly significant upside surprise," said Bret Jordan, analyst at Advest Inc.
He said AutoZone is benefiting from the soft economy as well as the decade-long boom in U.S. auto sales.
"Consumers who previously would have hired a mechanic are doing the work themselves," Jordan said.
AutoZone, based in Memphis, Tennessee, said fourth-quarter sales rose 12 percent to $1.84 billion. Sales at stores open at least one year grew 6.6 percent.
Store expansion, competitive pricing and advertising emphasizing the need for regular maintenance helped the company boost its share of the "do-it-yourself" repair market to 12.2 percent currently from 11.7 percent last year, AutoZone said.
AutoZone, the only nationwide parts store chain, plans to open 150 new outlets next year, after adding 102 stores in the past year to bring its total U.S. stores to 3,068.
"We're twice the size of our nearest competitor, so we have an advantage from a cost standpoint and a supply-chain standpoint," AutoZone Chairman and Chief Executive Steve Odland said in an interview.
Helping drive sales growth was the rising number of aging vehicles on the road, AutoZone said.
The average age of a passenger car on the road today is 9.3 years old, up from 8.1 years a decade ago, figures from an industry group show.
While Americans continue to buy new vehicles at a fast pace, they are also hanging onto their older cars and trucks longer, boosting the number of vehicles per household.
"You see more and more baby boomers handing their older vehicles off to their teenage kids," Odland said.
American drivers are also putting more miles on their cars each year, increasing maintenance needs, and buying more light trucks and sport utility vehicles, which they tend to drive longer and repair themselves, Odland said.
In the fourth quarter, AutoZone's board authorized a $300 million increase in the share repurchase program, boosting the plan to a total of $2.3 billion. By quarter's end, AutoZone had bought back 61.9 million shares at a cost of $2.09 billion.
AutoZone's stock jumped $4.65, or 6.4 percent, to $77.70 on the New York Stock Exchange. The shares have traded between $44.89 and $84.50 in the past year.