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Genuine Parts (GPC) Q3 Earnings Beat Estimates, Rise Y/Y
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Genuine Parts (GPC - Free Report) reported third-quarter 2022 adjusted earnings of $2.23 per share, up 18.6% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $2.03 per share. Higher-than-expected sales and operating profits across both its segments resulted in this outperformance.
The company reported net sales of $5,675 million, outpacing the Zacks Consensus Estimate of $5,392 million. The top line rose 17.8% year over year. The upside resulted from 12.7% growth in comparable sales and 9.1% benefit from acquisitions, partly offset by a net unfavorable impact of foreign currency translation, to the tune of 4%.
Genuine Parts Company Price, Consensus and EPS Surprise
The Automotive segment’s net sales totaled $3,490.4 million in the reported quarter, surpassing the Zacks Consensus Estimate of $3,414 million. The top line was also up 8.9% year over year on the back of comparable sales growth and acquisition benefits. The segment’s comparable sales rose 9.2% year over year. Operating profit increased 10% to $309 million and topped the consensus mark of $293 million. Segment profit margin came in at 8.9%, up 10 basis points from the year-ago period.
The Industrial Parts segment’s net sales totaled $2,184.8 million, surpassing the consensus estimate of $1,972 million. The top line also rose 35.3% year over year on comparable sales growth and acquisition benefits. The sales growth reflects a 16.6% contribution from the buyout of Kaman Distribution Group. The segment’s comparable sales climbed 19.6% in the reported quarter. Operating profit rose 46.3% from the prior-year quarter to $243 million, which beat the consensus mark of $196 million. The profit margin of 11.1% expanded 80 basis points from the third quarter of 2021.
Financial Performance
Genuine Parts had cash and cash equivalents worth $629.2 million as of Sep 30, 2022, declining from $919.1 million as of Sep 30, 2021. The company exited the third quarter with $2.1 billion in total liquidity, comprising $1.5 billion on the revolving credit facility and remaining as cash/cash equivalents. Long-term debt increased to $3,231.7 million from $2,432.5 million recorded as of Sep 30, 2021. The company generated a free cash flow of $1 billion for the nine months ended Sep 30, 2022.
2022 Guidance Modified
Genuine Parts updated part of its full-year 2022 guidance. It now projects revenues from automotive and industrial sales to witness a year-over-year uptick of 7-8% and 31-32% compared with the prior expected growth of 6-8% and 26-28%, respectively. Overall sales growth is projected in the range of 15-16%, up from the prior growth view of 12-14%. Full-year adjusted earnings per share are envisioned in the band of $8.05-$8.15, higher than the previous forecast of $7.80-$7.95. The guidance for operating cash flow and FCF remains unchanged within $1.5-$1.7 billion and $1.2-$1.4 billion, respectively.
Cummins has an expected earnings growth rate of 18.3% for the current year. The Zacks Consensus Estimate for CMI’s current-year earnings has been revised 0.23% upward in the past 30 days.
CarParts has an expected earnings growth rate of 45% for the current year. The Zacks Consensus Estimate for current-year earnings has remained constant over the past 30 days.
Dorman has an expected earnings growth rate of 10.1% for the current year. The Zacks Consensus Estimate for current-year earnings has remained constant over the past 30 days.
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Genuine Parts (GPC) Q3 Earnings Beat Estimates, Rise Y/Y
Genuine Parts (GPC - Free Report) reported third-quarter 2022 adjusted earnings of $2.23 per share, up 18.6% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $2.03 per share. Higher-than-expected sales and operating profits across both its segments resulted in this outperformance.
The company reported net sales of $5,675 million, outpacing the Zacks Consensus Estimate of $5,392 million. The top line rose 17.8% year over year. The upside resulted from 12.7% growth in comparable sales and 9.1% benefit from acquisitions, partly offset by a net unfavorable impact of foreign currency translation, to the tune of 4%.
Genuine Parts Company Price, Consensus and EPS Surprise
Genuine Parts Company price-consensus-eps-surprise-chart | Genuine Parts Company Quote
Segmental Performance
The Automotive segment’s net sales totaled $3,490.4 million in the reported quarter, surpassing the Zacks Consensus Estimate of $3,414 million. The top line was also up 8.9% year over year on the back of comparable sales growth and acquisition benefits. The segment’s comparable sales rose 9.2% year over year. Operating profit increased 10% to $309 million and topped the consensus mark of $293 million. Segment profit margin came in at 8.9%, up 10 basis points from the year-ago period.
The Industrial Parts segment’s net sales totaled $2,184.8 million, surpassing the consensus estimate of $1,972 million. The top line also rose 35.3% year over year on comparable sales growth and acquisition benefits. The sales growth reflects a 16.6% contribution from the buyout of Kaman Distribution Group. The segment’s comparable sales climbed 19.6% in the reported quarter. Operating profit rose 46.3% from the prior-year quarter to $243 million, which beat the consensus mark of $196 million. The profit margin of 11.1% expanded 80 basis points from the third quarter of 2021.
Financial Performance
Genuine Parts had cash and cash equivalents worth $629.2 million as of Sep 30, 2022, declining from $919.1 million as of Sep 30, 2021. The company exited the third quarter with $2.1 billion in total liquidity, comprising $1.5 billion on the revolving credit facility and remaining as cash/cash equivalents. Long-term debt increased to $3,231.7 million from $2,432.5 million recorded as of Sep 30, 2021. The company generated a free cash flow of $1 billion for the nine months ended Sep 30, 2022.
2022 Guidance Modified
Genuine Parts updated part of its full-year 2022 guidance. It now projects revenues from automotive and industrial sales to witness a year-over-year uptick of 7-8% and 31-32% compared with the prior expected growth of 6-8% and 26-28%, respectively. Overall sales growth is projected in the range of 15-16%, up from the prior growth view of 12-14%. Full-year adjusted earnings per share are envisioned in the band of $8.05-$8.15, higher than the previous forecast of $7.80-$7.95. The guidance for operating cash flow and FCF remains unchanged within $1.5-$1.7 billion and $1.2-$1.4 billion, respectively.
Zacks Rank & Key Picks
GPC currently has a Zacks Rank #3 (Hold).
Some better-ranked players in the auto space are Cummins Inc. (CMI - Free Report) , CarParts.com (PRTS - Free Report) and Dorman Products (DORM - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Cummins has an expected earnings growth rate of 18.3% for the current year. The Zacks Consensus Estimate for CMI’s current-year earnings has been revised 0.23% upward in the past 30 days.
CarParts has an expected earnings growth rate of 45% for the current year. The Zacks Consensus Estimate for current-year earnings has remained constant over the past 30 days.
Dorman has an expected earnings growth rate of 10.1% for the current year. The Zacks Consensus Estimate for current-year earnings has remained constant over the past 30 days.