Genuine Parts Company (GPC - Free Report) delivered third-quarter 2023 adjusted earnings of $2.49 per share, up 11.6% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $2.40 per share. Higher-than-expected profit from the Industrial Parts segment resulted in the outperformance.
The company reported net sales of $5,824.6 million, lagging the Zacks Consensus Estimate of $5,888.4 million. The top line, however, rose 2.6% year over year. Year-over-year growth in revenues largely resulted from increased comparable sales across both segments and benefits from acquisitions and a net unfavorable impact of foreign currency translation.
Segmental Performance
The Automotive segment’s net sales totaled $3,626.9 million in the reported quarter. The top line was up 3.9% year over year on the back of comparable sales growth, forex and acquisition benefits. The segment’s comparable sales rose 0.6% year over year. Operating profit increased 4.1% to $322 million but missed our forecast of $329 million. Segment profit margin came in at 8.9%, flat compared with the year-ago period.
The Industrial Parts segment’s net sales totaled $2,197.6 million. The top line rose by 0.6% year over year on comparable sales growth and acquisition benefits, slightly offset by a net unfavorable impact of foreign currency translation. The segment’s comparable sales inched up 0.3% in the reported quarter. Operating profit rose 16.6% from the prior-year quarter to $283 million, beating our forecast of $255.8 million. The profit margin of 12.9% expanded 180 basis points year over year in the third quarter of 2023.
Financial Performance
Genuine Parts had cash and cash equivalents worth $654.6 million as of Sep 30, 2023, up from $653.5 million as of Dec 31, 2022. Long-term debt decreased to $2,963.4 million from $3,076.8 million as of Dec 31, 2022. The company exited the third quarter with $2.2 billion in total liquidity, comprising $1.5 billion on the revolving credit facility and the remainder as cash/cash equivalents. The company generated free cash flow of $481 million in the quarter under review.
Revised 2023 Guidance
Genuine Parts projects revenues from automotive and industrial sales to witness a year-over-year uptick of 4-6% each, the same as the prior forecast. Overall sales growth is projected in the range of 4-6%, the same as the prior estimate. However, the company now envisions adjusted earnings in the band of $9.20-$9.30 per share, up from the prior guidance of $9.15-$9.30 per share. The guidance for operating cash flow and FCF remains unchanged within $1.3-$1.4 billion and $900-$1,000 million, respectively.
Zacks Rank & Other Key Picks
GPC currently carries a Zacks Rank #2 (Buy).
A few other top-ranked players in the auto space include Allison Transmission Holdings (ALSN - Free Report) , Adient PLC (ADNT - Free Report) and PACCAR Inc. (PCAR - Free Report) .
The Zacks Consensus Estimate for ALSN’s 2023 sales and EPS implies year-over-year growth of 9.3% and 26.6%, respectively. The earnings estimate for 2023 has been revised upward by 1 cent in the past seven days. The consensus mark for 2024 sales and EPS implies year-over-year growth of 2% and 6%, respectively. Allison carries a Zacks Rank #1 (Strong Buy) currently and has a VGM Score of B.
The Zacks Consensus Estimate for ADNT’s fiscal 2023 sales and EPS implies year-over-year growth of 9% and 1,827%, respectively. The earnings estimate for the current fiscal has been revised upward by 4 cents in the past seven days. The consensus mark for fiscal 2024 sales and EPS implies year-over-year growth of 3.4% and 74%, respectively. Adient sports a Zacks Rank #1 and has a VGM Score of A.
The Zacks Consensus Estimate for PCAR’s 2023 sales and EPS implies year-over-year growth of 19.2% and 49%, respectively. Over the past 30 days, PACCAR’s earnings estimate for 2023 and 2024 has been revised upward by 2 cents and 13 cents, respectively. The stock currently carries a Zacks Rank #2 and has a VGM Score of A.
You can see the complete list of today’s Zacks #1 Rank stocks here.
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Genuine Parts Company (GPC - Free Report) delivered third-quarter 2023 adjusted earnings of $2.49 per share, up 11.6% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $2.40 per share. Higher-than-expected profit from the Industrial Parts segment resulted in the outperformance.
The company reported net sales of $5,824.6 million, lagging the Zacks Consensus Estimate of $5,888.4 million. The top line, however, rose 2.6% year over year. Year-over-year growth in revenues largely resulted from increased comparable sales across both segments and benefits from acquisitions and a net unfavorable impact of foreign currency translation.
Segmental Performance
The Automotive segment’s net sales totaled $3,626.9 million in the reported quarter. The top line was up 3.9% year over year on the back of comparable sales growth, forex and acquisition benefits. The segment’s comparable sales rose 0.6% year over year. Operating profit increased 4.1% to $322 million but missed our forecast of $329 million. Segment profit margin came in at 8.9%, flat compared with the year-ago period.
The Industrial Parts segment’s net sales totaled $2,197.6 million. The top line rose by 0.6% year over year on comparable sales growth and acquisition benefits, slightly offset by a net unfavorable impact of foreign currency translation. The segment’s comparable sales inched up 0.3% in the reported quarter. Operating profit rose 16.6% from the prior-year quarter to $283 million, beating our forecast of $255.8 million. The profit margin of 12.9% expanded 180 basis points year over year in the third quarter of 2023.
Financial Performance
Genuine Parts had cash and cash equivalents worth $654.6 million as of Sep 30, 2023, up from $653.5 million as of Dec 31, 2022. Long-term debt decreased to $2,963.4 million from $3,076.8 million as of Dec 31, 2022. The company exited the third quarter with $2.2 billion in total liquidity, comprising $1.5 billion on the revolving credit facility and the remainder as cash/cash equivalents. The company generated free cash flow of $481 million in the quarter under review.
Revised 2023 Guidance
Genuine Parts projects revenues from automotive and industrial sales to witness a year-over-year uptick of 4-6% each, the same as the prior forecast. Overall sales growth is projected in the range of 4-6%, the same as the prior estimate. However, the company now envisions adjusted earnings in the band of $9.20-$9.30 per share, up from the prior guidance of $9.15-$9.30 per share. The guidance for operating cash flow and FCF remains unchanged within $1.3-$1.4 billion and $900-$1,000 million, respectively.
Zacks Rank & Other Key Picks
GPC currently carries a Zacks Rank #2 (Buy).
A few other top-ranked players in the auto space include Allison Transmission Holdings (ALSN - Free Report) , Adient PLC (ADNT - Free Report) and PACCAR Inc. (PCAR - Free Report) .
The Zacks Consensus Estimate for ALSN’s 2023 sales and EPS implies year-over-year growth of 9.3% and 26.6%, respectively. The earnings estimate for 2023 has been revised upward by 1 cent in the past seven days. The consensus mark for 2024 sales and EPS implies year-over-year growth of 2% and 6%, respectively. Allison carries a Zacks Rank #1 (Strong Buy) currently and has a VGM Score of B.
The Zacks Consensus Estimate for ADNT’s fiscal 2023 sales and EPS implies year-over-year growth of 9% and 1,827%, respectively. The earnings estimate for the current fiscal has been revised upward by 4 cents in the past seven days. The consensus mark for fiscal 2024 sales and EPS implies year-over-year growth of 3.4% and 74%, respectively. Adient sports a Zacks Rank #1 and has a VGM Score of A.
The Zacks Consensus Estimate for PCAR’s 2023 sales and EPS implies year-over-year growth of 19.2% and 49%, respectively. Over the past 30 days, PACCAR’s earnings estimate for 2023 and 2024 has been revised upward by 2 cents and 13 cents, respectively. The stock currently carries a Zacks Rank #2 and has a VGM Score of A.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
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