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Genuine Parts (GPC) Down 4.1% Since Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Genuine Parts Company (GPC - Free Report) . Shares have lost about 4.1% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is GPC 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 drivers.
Genuine Parts Q4 Earnings Beat Estimates, Up Y/Y
Genuine Parts reported adjusted earnings of $1.12 per share, beating the Zacks Consensus Estimate of $1.11. Adjusted earnings per share in the year-ago quarter were $1.02.
The company recorded net income of $108.2 million in fourth-quarter 2017, down from $152.5 million in the prior-year quarter.
Genuine Parts reported net sales of $4.21 billion, up 11.3% year over year. The figure also surpassed the Zacks Consensus Estimate of $4.09 billion. Alliance Automotive Group (AAG), which was acquired in November 2017, contributed 6.8% in the sales figure.
Operating profit increased to $313.3 million from $276.3 million in fourth-quarter 2016. Selling, administrative and other expenses rose to $1 billion from $856 million a year ago.
Full-Year 2017 Results
Genuine Parts reported adjusted earnings of $4.18 per share in 2017, down from $4.59 per share in 2016. The Zacks Consensus Estimate for earnings was $4.63 per share.
Revenues increased to $16.3 billion from $15.3 billion in the prior year. The figure also surpassed Zacks Consensus Estimate of $16.14 billion.
Segment Results
Revenues from the Automotive segment improved 16.7% to $2.3 billion from the year-ago figure of $1.9 billion. Moreover, the segment’s operating profit rose to $183.2 million in the reported quarter from $160 million a year ago.
Revenues at the Motion Industries or Industrial segment increased 7.4% to $1.24 billion. Operating profit at the segment was $102 million, up from $81 million in the year-ago quarter.
The Electrical or EIS segment’s revenues rose 8.9% year over year to $193 million. Operating profit, however, decreased to $13.5 million from $15.4 million in the year-ago quarter.
The S. P. Richards or Business Products segment’s revenues declined 2.2% to $467 million. Operating profit at the segment declined to $13.7million from $19.9 million recorded in the prior-year quarter.
Financial Position
Genuine Parts had cash and cash equivalents of $315 million as of Dec 31, 2017, up from $243 million as of Dec 31, 2016. Long-term debt increased to $2.6 billion as of Dec 31, 2017, from $550 million as of Dec 31, 2016.
In fourth-quarter 2017, capital expenditures decreased to $54.6 million from $74 million in the year-ago period.
Guidance
For full-year 2018, Genuine Parts expects revenue growth rate in the range of 12-13%, whereas adjusted earnings per share are projected to be in the range of $5.6-$5.75. These anticipations include the benefits from AAG’s full-year operations and roughly $80-$90 million in lower income taxes.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter. In the past month, the consensus estimate has shifted by 7.8% due to these changes.
Currently, GPC has an average Growth Score of C, though it is lagging a bit on the momentum front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been trending upward for the stock and the magnitude of this revision looks promising. Notably, GPC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Genuine Parts (GPC) Down 4.1% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Genuine Parts Company (GPC - Free Report) . Shares have lost about 4.1% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is GPC 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 drivers.
Genuine Parts Q4 Earnings Beat Estimates, Up Y/Y
Genuine Parts reported adjusted earnings of $1.12 per share, beating the Zacks Consensus Estimate of $1.11. Adjusted earnings per share in the year-ago quarter were $1.02.
The company recorded net income of $108.2 million in fourth-quarter 2017, down from $152.5 million in the prior-year quarter.
Genuine Parts reported net sales of $4.21 billion, up 11.3% year over year. The figure also surpassed the Zacks Consensus Estimate of $4.09 billion. Alliance Automotive Group (AAG), which was acquired in November 2017, contributed 6.8% in the sales figure.
Operating profit increased to $313.3 million from $276.3 million in fourth-quarter 2016. Selling, administrative and other expenses rose to $1 billion from $856 million a year ago.
Full-Year 2017 Results
Genuine Parts reported adjusted earnings of $4.18 per share in 2017, down from $4.59 per share in 2016. The Zacks Consensus Estimate for earnings was $4.63 per share.
Revenues increased to $16.3 billion from $15.3 billion in the prior year. The figure also surpassed Zacks Consensus Estimate of $16.14 billion.
Segment Results
Revenues from the Automotive segment improved 16.7% to $2.3 billion from the year-ago figure of $1.9 billion. Moreover, the segment’s operating profit rose to $183.2 million in the reported quarter from $160 million a year ago.
Revenues at the Motion Industries or Industrial segment increased 7.4% to $1.24 billion. Operating profit at the segment was $102 million, up from $81 million in the year-ago quarter.
The Electrical or EIS segment’s revenues rose 8.9% year over year to $193 million. Operating profit, however, decreased to $13.5 million from $15.4 million in the year-ago quarter.
The S. P. Richards or Business Products segment’s revenues declined 2.2% to $467 million. Operating profit at the segment declined to $13.7million from $19.9 million recorded in the prior-year quarter.
Financial Position
Genuine Parts had cash and cash equivalents of $315 million as of Dec 31, 2017, up from $243 million as of Dec 31, 2016. Long-term debt increased to $2.6 billion as of Dec 31, 2017, from $550 million as of Dec 31, 2016.
In fourth-quarter 2017, capital expenditures decreased to $54.6 million from $74 million in the year-ago period.
Guidance
For full-year 2018, Genuine Parts expects revenue growth rate in the range of 12-13%, whereas adjusted earnings per share are projected to be in the range of $5.6-$5.75. These anticipations include the benefits from AAG’s full-year operations and roughly $80-$90 million in lower income taxes.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter. In the past month, the consensus estimate has shifted by 7.8% due to these changes.
Genuine Parts Company Price and Consensus
Genuine Parts Company Price and Consensus | Genuine Parts Company Quote
VGM Scores
Currently, GPC has an average Growth Score of C, though it is lagging a bit on the momentum front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been trending upward for the stock and the magnitude of this revision looks promising. Notably, GPC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.