Genuine Parts Company (GPC - Free Report) reported first-quarter 2023 adjusted earnings of $2.14 per share, up 15.1% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $2.02 per share. Higher-than-expected sales across both of its segments resulted in this outperformance.
The company reported net sales of $5,765.1 million, outpacing the Zacks Consensus Estimate of $5,686 million. The top line rose 8.9% year over year. The upside resulted from growth in comparable sales across both segments and benefit from acquisitions, partly offset by a net unfavorable impact of foreign currency translation of 2.2%.
Segmental Performance
The Automotive segment’s net sales totaled $3,505.8 million in the reported quarter, surpassing the Zacks Consensus Estimate of $3,462 million. The top line was also up 7% year over year on the back of comparable sales growth and acquisition benefits. The segment’s comparable sales rose 6.6% year over year. Operating profit was unchanged at $264 million, lagging the Zacks Consensus Estimate of $291 million. The profit margin was at 7.5%, down 60 basis points from the year-ago period.
The Industrial Parts segment’s net sales totaled $2,259.2 million, surpassing the Zacks Consensus Estimate of $2,218 million. The top line also rose 11.9% year over year on comparable sales growth and acquisition benefits. The segment’s comparable sales climbed 12.1% in the reported quarter. Operating profit rose 39.1% from the prior-year quarter to $262 million, which beat the Zacks Consensus Estimate of $225 million. The profit margin of 11.6% expanded by 230 basis points from the first quarter of 2022.
Financial Performance
Genuine Parts had cash and cash equivalents worth $651.2 million as of Mar 31, 2023, declining from $653.5 million as of Dec 31, 2022. The company exited the first quarter with $2.1 billion in total liquidity, comprising $1.4 billion on the revolving credit facility and the remainder as cash/cash equivalents. Long-term debt increased to $3,094.3 million from $3,076.8 million as of Dec 31, 2022. The company generated free cash flow of $109.4 million for the three months ended Mar 31, 2023.
Revised Guidance for 2023
Genuine Parts expects revenues from automotive and industrial sale to witness year-over-year upticks of 4-6% and 4-6%, respectively, same as the previous guidance. Overall sales growth is projected to be 4-6%, same as the earlier projection. Full-year adjusted earnings are envisioned to be $8.95-$9.10 per share, up from the previously mentioned $8.80-$8.95 per share. The operating cash flow is estimated to be $1.3-$1.4 billion, up from the previously stated $1.2-$1.4 billion, whereas the FCF is estimated to be $900-$1,000 million, up from $800-$1,000 million stated earlier.
Zacks Rank & Key Picks
GPC currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A few better-ranked players in the auto space are Geely Automobile Holdings Limited (GELYY - Free Report) , BYD Company Limited (BYDDY - Free Report) and Ferrari N.V. (RACE - Free Report) , all of which currently sport a Zacks Rank #1.
Geely is engaged in automobile manufacturing and related areas. The Zacks Consensus Estimates for GELYY’s 2023 sales and earnings implies year-over-year growth of 57.5% and 7.4%, respectively.
BYD is engaged in the research, development, manufacture and distribution of automobiles, secondary rechargeable batteries, and mobile phone components. The Zacks Consensus Estimate for BYDDY’s 2023 sales implies year-over-year growth of 175%.
Ferrari is engaged in designing, manufacturing and selling sports cars. The Zacks Consensus Estimates for RACE’s 2023 sales and earnings implies year-over-year growth of 14% and 19.8%, respectively.
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Genuine Parts Company (GPC - Free Report) reported first-quarter 2023 adjusted earnings of $2.14 per share, up 15.1% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $2.02 per share. Higher-than-expected sales across both of its segments resulted in this outperformance.
The company reported net sales of $5,765.1 million, outpacing the Zacks Consensus Estimate of $5,686 million. The top line rose 8.9% year over year. The upside resulted from growth in comparable sales across both segments and benefit from acquisitions, partly offset by a net unfavorable impact of foreign currency translation of 2.2%.
Segmental Performance
The Automotive segment’s net sales totaled $3,505.8 million in the reported quarter, surpassing the Zacks Consensus Estimate of $3,462 million. The top line was also up 7% year over year on the back of comparable sales growth and acquisition benefits. The segment’s comparable sales rose 6.6% year over year. Operating profit was unchanged at $264 million, lagging the Zacks Consensus Estimate of $291 million. The profit margin was at 7.5%, down 60 basis points from the year-ago period.
The Industrial Parts segment’s net sales totaled $2,259.2 million, surpassing the Zacks Consensus Estimate of $2,218 million. The top line also rose 11.9% year over year on comparable sales growth and acquisition benefits. The segment’s comparable sales climbed 12.1% in the reported quarter. Operating profit rose 39.1% from the prior-year quarter to $262 million, which beat the Zacks Consensus Estimate of $225 million. The profit margin of 11.6% expanded by 230 basis points from the first quarter of 2022.
Financial Performance
Genuine Parts had cash and cash equivalents worth $651.2 million as of Mar 31, 2023, declining from $653.5 million as of Dec 31, 2022. The company exited the first quarter with $2.1 billion in total liquidity, comprising $1.4 billion on the revolving credit facility and the remainder as cash/cash equivalents. Long-term debt increased to $3,094.3 million from $3,076.8 million as of Dec 31, 2022. The company generated free cash flow of $109.4 million for the three months ended Mar 31, 2023.
Revised Guidance for 2023
Genuine Parts expects revenues from automotive and industrial sale to witness year-over-year upticks of 4-6% and 4-6%, respectively, same as the previous guidance. Overall sales growth is projected to be 4-6%, same as the earlier projection. Full-year adjusted earnings are envisioned to be $8.95-$9.10 per share, up from the previously mentioned $8.80-$8.95 per share. The operating cash flow is estimated to be $1.3-$1.4 billion, up from the previously stated $1.2-$1.4 billion, whereas the FCF is estimated to be $900-$1,000 million, up from $800-$1,000 million stated earlier.
Zacks Rank & Key Picks
GPC currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A few better-ranked players in the auto space are Geely Automobile Holdings Limited (GELYY - Free Report) , BYD Company Limited (BYDDY - Free Report) and Ferrari N.V. (RACE - Free Report) , all of which currently sport a Zacks Rank #1.
Geely is engaged in automobile manufacturing and related areas. The Zacks Consensus Estimates for GELYY’s 2023 sales and earnings implies year-over-year growth of 57.5% and 7.4%, respectively.
BYD is engaged in the research, development, manufacture and distribution of automobiles, secondary rechargeable batteries, and mobile phone components. The Zacks Consensus Estimate for BYDDY’s 2023 sales implies year-over-year growth of 175%.
Ferrari is engaged in designing, manufacturing and selling sports cars. The Zacks Consensus Estimates for RACE’s 2023 sales and earnings implies year-over-year growth of 14% and 19.8%, respectively.
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
Download your free report now to see them.
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