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Genuine Parts Company ( GPC - Analyst Report ) revealed a 15% rise in profit to 86 cents per share in the fourth quarter of 2011 from 75 cents per share in the same quarter of 2010. The profit per share exceeded the Zacks Consensus Estimate by 3 cents.
In absolute terms, profits rose 14% to $135 million from $119 million in the fourth quarter of 2010. Sales went up 7% to $3.0 billion, which was in line with the Zacks Consensus Estimate.
Sales in the Automotive segment rose 6% to $1.5 billion, Motion Industries or Industrial segment escalated 13% to $1.0 billion, and EIS or Electrical segment grew 10% to $137.6 million. However, S.P. Richards or Office Products Group sales inched down 1% to $391.4 million.
For full year 2011, Genuine Parts reported a 19% increase in profit to $565 million or $3.58 per share from $476 million or $3.00 per share in 2010. The profit was higher than the Zacks Consensus Estimate by tad 2 cents per share. Sales in the year appreciated 11% to $12.5 billion, meeting the Zacks Consensus Estimate.
Sales in the Automotive segment scaled up 8% to $6.1 billion reflecting solid fundamentals in the automotive aftermarket, including the overall aging of the vehicle population. Sales in the Industrial segment rose 19% to $4.2 billion, driven by the company’s internal growth initiatives and strength in the manufacturing sector.
Sales in the Office Products Group inched up 3% to $1.7 billion. Meanwhile, sales in the Electrical segment improved 24% to $557.5 million.
Genuine Parts also announced an increase in its annual dividend payment, making 2012 the 56th consecutive year of increased dividends paid to shareholders. The company’s Board of Directors announced a 10% increase in cash dividend to an annual rate of $1.98 per share compared with the previous dividend of $1.80 per share. The increased quarterly cash dividend of 49.5 cents per share is payable on April 2, 2012 to shareholders of record as of March 9, 2012.
Genuine Parts had cash and cash equivalents of $525.0 million as of December 31, 2011, a marginal decrease from $530.0 million as of December 31, 2010. Long-term debt remained unchanged at $500 million as of December 31, 2011 compared with the corresponding period a year ago.
In 2011, Genuine Parts’ net cash flow from operations declined to $625.0 million from $678.7 million in the prior-year, due to unfavorable changes in operating assets and liabilities. Meanwhile, capital expenditures increased to $103.5 million from $85.4 million in 2010.
Genuine Parts has undertaken various initiatives to boost sales and earnings, such as product line expansion, penetration into new markets and cost-saving activities. The company relies on a diverse product portfolio for top-line and bottom-line growth. Its major competitors include Advance Auto Parts ( AAP - Analyst Report ) , AutoZone ( AZO - Analyst Report ) and W.W. Grainger ( GWW - Analyst Report ) .
Currently, the company retains a Zacks #2 Rank on its stock, which translates to a “Buy” rating for the short term (1–3 months).
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