Genuine Parts Company (GPC - Free Report) reported earnings of $1.24 per share in third-quarter 2016, flat with the year-ago quarter. Earnings per share, however, missed the Zacks Consensus Estimate of $1.29.
The company recorded net income of $185.3 million in the third quarter of 2016, down from $188 million in the prior-year quarter.
Revenues in the reported quarter rose 0.5% year over year to $3.94 billion but lagged the Zacks Consensus Estimate of $4.04 billion. Acquisitions contributed 3.5% to sales but currency had no impact on the same.
Operating profit decreased to $328 million from $348.5 million in the third quarter of 2015. Selling, general and administrative expenses rose to $869.6 million from $834.4 million a year ago.
Segment Results
Revenues at the Automotive Parts segment improved 1.5% to $2.1 billion from the year-ago level of $2.06 billion. The improvement was driven by acquisitions and currency tailwinds, partially offset by lower core sales. The segment’s operating profit decreased to $197.9 million in the reported quarter from $202 million a year ago.
Revenues at the Motion Industries or Industrial segment dropped 0.7% to $1.16 billion owing to lower sales volume, partially offset by synergies from acquisitions. Operating profit at the segment was $85.6 million, down from $90.1 million in the year-ago quarter.
The Electrical or EIS segment’s revenues fell 9% to $178.4 million. Operating profit decreased to $14.3 million from $20 million in the year-ago quarter.
The S. P. Richards or Office Products segment’s revenues improved 5% to $535.2 million, driven by benefits from acquisitions, partially offset by lower sales volume. Operating profit at the segment declined to $30.3 million from $36.4 million a year ago.
Financial Position
Genuine Parts had cash and cash equivalents of $225.2 million as of Sep 30, 2016, up from $199.3 million as of Sep 30, 2015. Long-term debt declined to $300 million as of Sep 30, 2016, from $500 million as of Sep 30, 2015.
In the first nine months of 2016, Genuine Parts’ net cash flow from operations decreased to $741.4 million from $896 million in the prior-year period. Capital expenditures increased to $36.9 million from $24.5 million a year ago.
Guidance
For 2016, Genuine Parts expects annual revenue to range from flat to up 1% from 2015, lower than the previous expectation of 1%–2% improvement. Earnings per share in 2016 are expected to be in the range of $4.55–$4.60 compared to the previous projection of $4.70–$4.75.
Zacks Rank
Genuine Parts currently carries a Zacks Rank #3 (Hold).
Some better-ranked automobile stocks include The Goodyear Tire & Rubber Company (GT - Free Report) , Tata Motors Limited and Standard Motor Products Inc. (SMP - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here..
The Goodyear Tire & Rubber Company has seen its earnings estimates move north over the last 60 days.
Tata Motors Limited has a long-term expected growth rate of 3.60%.
Standard Motor Products Inc. has a long-term expected growth rate of 15%.
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Genuine Parts Company (GPC - Free Report) reported earnings of $1.24 per share in third-quarter 2016, flat with the year-ago quarter. Earnings per share, however, missed the Zacks Consensus Estimate of $1.29.
The company recorded net income of $185.3 million in the third quarter of 2016, down from $188 million in the prior-year quarter.
Revenues in the reported quarter rose 0.5% year over year to $3.94 billion but lagged the Zacks Consensus Estimate of $4.04 billion. Acquisitions contributed 3.5% to sales but currency had no impact on the same.
Operating profit decreased to $328 million from $348.5 million in the third quarter of 2015. Selling, general and administrative expenses rose to $869.6 million from $834.4 million a year ago.
Segment Results
Revenues at the Automotive Parts segment improved 1.5% to $2.1 billion from the year-ago level of $2.06 billion. The improvement was driven by acquisitions and currency tailwinds, partially offset by lower core sales. The segment’s operating profit decreased to $197.9 million in the reported quarter from $202 million a year ago.
Revenues at the Motion Industries or Industrial segment dropped 0.7% to $1.16 billion owing to lower sales volume, partially offset by synergies from acquisitions. Operating profit at the segment was $85.6 million, down from $90.1 million in the year-ago quarter.
The Electrical or EIS segment’s revenues fell 9% to $178.4 million. Operating profit decreased to $14.3 million from $20 million in the year-ago quarter.
The S. P. Richards or Office Products segment’s revenues improved 5% to $535.2 million, driven by benefits from acquisitions, partially offset by lower sales volume. Operating profit at the segment declined to $30.3 million from $36.4 million a year ago.
Financial Position
Genuine Parts had cash and cash equivalents of $225.2 million as of Sep 30, 2016, up from $199.3 million as of Sep 30, 2015. Long-term debt declined to $300 million as of Sep 30, 2016, from $500 million as of Sep 30, 2015.
In the first nine months of 2016, Genuine Parts’ net cash flow from operations decreased to $741.4 million from $896 million in the prior-year period. Capital expenditures increased to $36.9 million from $24.5 million a year ago.
Guidance
For 2016, Genuine Parts expects annual revenue to range from flat to up 1% from 2015, lower than the previous expectation of 1%–2% improvement. Earnings per share in 2016 are expected to be in the range of $4.55–$4.60 compared to the previous projection of $4.70–$4.75.
Zacks Rank
Genuine Parts currently carries a Zacks Rank #3 (Hold).
Some better-ranked automobile stocks include The Goodyear Tire & Rubber Company (GT - Free Report) , Tata Motors Limited and Standard Motor Products Inc. (SMP - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here..
The Goodyear Tire & Rubber Company has seen its earnings estimates move north over the last 60 days.
Tata Motors Limited has a long-term expected growth rate of 3.60%.
Standard Motor Products Inc. has a long-term expected growth rate of 15%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Zacks 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.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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