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Why Is Genuine Parts (GPC) Down 2.6% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Genuine Parts Company (GPC - Free Report) . Shares have lost about 2.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Genuine Parts Q4 Earnings & Revenues Beat Estimates
Genuine Parts reported earnings of $1.02 per share in fourth-quarter 2016, lower than $1.07 recorded in the year-ago quarter. Also, earnings per share surpassed the Zacks Consensus Estimate of $1.01.
The company recorded net income of $152.5 million in the fourth quarter of 2016, down from $161.3 million in the prior-year quarter.
Revenues in the reported quarter rose 3% year over year to $3.78 billion and surpassed the Zacks Consensus Estimate of $3.77 billion. The rise was due to the benefit from acquisitions in each of the business segments and also improvement in comparable sales trends in the Automotive, Industrial and Electrical/Electronic businesses.
While, operating profit decreased to $276.3 million from $291.1 million in the fourth quarter of 2015, selling, general and administrative expenses rose to $855.6 million from $797.9 million a year ago.
2016 Performance
Genuine Parts’ earnings decreased to $4.59 per share for full-year 2016 from $4.63 in 2015, surpassing the Zacks Consensus Estimate of $4.58. Revenues for full-year 2016 increased 0.4% to $15.34 billion from $15.28 billion in 2015 and surpassed the Zacks Consensus Estimate of $15.31 billion.
Segment Results
Revenues at the Automotive Parts segment improved 2% to $2 billion from the year-ago level of $1.95 billion. The segment’s operating profit decreased to $160 million in the reported quarter from $169.1 million a year ago.
Revenues at the Motion Industries or Industrial segment increased 4% to $1.15 billion. Operating profit at the segment was $80.9 million, up from $72.4 million in the year-ago quarter.
The Electrical or EIS segment’s revenues were flat year over year at $177 million. Operating profit decreased to $15.4 million from $16.1 million in the year-ago quarter.
The S. P. Richards or Office Products segment’s revenues improved 4% to $476 million. Operating profit at the segment declined to $19.9 million from $33.4 million a year ago.
Financial Position
Genuine Parts had cash and cash equivalents of $242.9 million as of Dec 31, 2016, up from $211.6 million as of Dec 31, 2015. Also, long-term debt increased to $875 million as of Dec 31, 2016, from $625 million as of Dec 31, 2015.
In 2016, Genuine Parts’ net cash flow from operations decreased to $946.1 million from $1.2 billion in the prior-year period. Capital expenditures increased to $160.6 million from $109.5 million a year ago.
Guidance
For 2017, annual revenues of Genuine Parts are expected to increase in the range of 3% to 4%. Earnings per share in 2017 are expected in the band of $4.70–$4.80.
Dividend
The board of directors at Genuine Parts raised dividend to $2.70 per share from $2.63. On Apr 3, 2017, the company is expected to pay the quarterly dividend of $0.675 to shareholders on record as of Mar 10, 2017. This marks Genuine Parts’ dividend increase for 61 consecutive years.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been two downward revisions for the current quarter. In the past month, the consensus estimate has shifted downward by 7.3% due to these changes.
At this time, Genuine Parts' stock has an average Growth Score of 'C', though it is lagging a bit on the momentum front with a 'D'. Following the exact same course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions also indicates a downward shift. It's no surprise that the stock has a Zacks Rank #4 (Sell). We are expecting a below average return from the stock in the next few months.
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Why Is Genuine Parts (GPC) Down 2.6% Since the Last Earnings Report?
It has been about a month since the last earnings report for Genuine Parts Company (GPC - Free Report) . Shares have lost about 2.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Genuine Parts Q4 Earnings & Revenues Beat Estimates
Genuine Parts reported earnings of $1.02 per share in fourth-quarter 2016, lower than $1.07 recorded in the year-ago quarter. Also, earnings per share surpassed the Zacks Consensus Estimate of $1.01.
The company recorded net income of $152.5 million in the fourth quarter of 2016, down from $161.3 million in the prior-year quarter.
Revenues in the reported quarter rose 3% year over year to $3.78 billion and surpassed the Zacks Consensus Estimate of $3.77 billion. The rise was due to the benefit from acquisitions in each of the business segments and also improvement in comparable sales trends in the Automotive, Industrial and Electrical/Electronic businesses.
While, operating profit decreased to $276.3 million from $291.1 million in the fourth quarter of 2015, selling, general and administrative expenses rose to $855.6 million from $797.9 million a year ago.
2016 Performance
Genuine Parts’ earnings decreased to $4.59 per share for full-year 2016 from $4.63 in 2015, surpassing the Zacks Consensus Estimate of $4.58. Revenues for full-year 2016 increased 0.4% to $15.34 billion from $15.28 billion in 2015 and surpassed the Zacks Consensus Estimate of $15.31 billion.
Segment Results
Revenues at the Automotive Parts segment improved 2% to $2 billion from the year-ago level of $1.95 billion. The segment’s operating profit decreased to $160 million in the reported quarter from $169.1 million a year ago.
Revenues at the Motion Industries or Industrial segment increased 4% to $1.15 billion. Operating profit at the segment was $80.9 million, up from $72.4 million in the year-ago quarter.
The Electrical or EIS segment’s revenues were flat year over year at $177 million. Operating profit decreased to $15.4 million from $16.1 million in the year-ago quarter.
The S. P. Richards or Office Products segment’s revenues improved 4% to $476 million. Operating profit at the segment declined to $19.9 million from $33.4 million a year ago.
Financial Position
Genuine Parts had cash and cash equivalents of $242.9 million as of Dec 31, 2016, up from $211.6 million as of Dec 31, 2015. Also, long-term debt increased to $875 million as of Dec 31, 2016, from $625 million as of Dec 31, 2015.
In 2016, Genuine Parts’ net cash flow from operations decreased to $946.1 million from $1.2 billion in the prior-year period. Capital expenditures increased to $160.6 million from $109.5 million a year ago.
Guidance
For 2017, annual revenues of Genuine Parts are expected to increase in the range of 3% to 4%. Earnings per share in 2017 are expected in the band of $4.70–$4.80.
Dividend
The board of directors at Genuine Parts raised dividend to $2.70 per share from $2.63. On Apr 3, 2017, the company is expected to pay the quarterly dividend of $0.675 to shareholders on record as of Mar 10, 2017. This marks Genuine Parts’ dividend increase for 61 consecutive years.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been two downward revisions for the current quarter. In the past month, the consensus estimate has shifted downward by 7.3% due to these changes.
Genuine Parts Company Price and Consensus
Genuine Parts Company Price and Consensus | Genuine Parts Company Quote
VGM Scores
At this time, Genuine Parts' stock has an average Growth Score of 'C', though it is lagging a bit on the momentum front with a 'D'. Following the exact same course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions also indicates a downward shift. It's no surprise that the stock has a Zacks Rank #4 (Sell). We are expecting a below average return from the stock in the next few months.