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Genuine Parts (GPC) Tops Q4 Earnings Estimates, Ups Dividend

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Genuine Parts Company (GPC - Free Report) reported fourth-quarter adjusted earnings of $1.52 per share, up 19.7% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $1.32 per share. Higher-than-expected revenues and profit from the Industrial Parts segment resulted in this outperformance. Revenues and operating income from this segment came in at $1,429.7 million and $133.4 million, beating the Zacks Consensus Estimate of $1,390 million and $122 million, respectively.

This Atlanta-based automotive replacement parts supplier reported net sales of $4,251.6 million, missing the Zacks Consensus Estimate of $4,319 million. Moreover, the top-line figure was lower than the year-ago quarter’s $4,279.9 million. This downside resulted from a 2.8% decline in comparable sales, partly offset by 0.8% benefit from acquisitions, and a 1.3% net impact of foreign currency and other.

Genuine Parts Company Price, Consensus and EPS Surprise

Genuine Parts Company Price, Consensus and EPS Surprise

Genuine Parts Company price-consensus-eps-surprise-chart | Genuine Parts Company Quote

Segmental Performance

The Automotive segment’s net sales — accounting for 66% of the firm’s total revenues — totaled $2,821.8 million for the reported quarter, up 0.7% year over year on the back of favorable forex translations and acquisition benefits. The segment’s comparable sales declined 2% for the fourth quarter. The segment’s operating profit increased 19.4% year over year to $240 million for the reported quarter.

The Industrial Parts segment’s net sales dropped 3.3% from the year-ago quarter to $1,429.7 million. The segment’s comparable sales also declined 4.4% for the reported quarter. Nonetheless, operating profit rose 5.1% from the prior-year quarter to $133.4 million.

Financial Tidbits

Total operating expenses declined 9.3% for the December-end quarter, primarily due to fall in SG&A costs. SG&A expenses for fourth-quarter 2020 slid 2.6% year over year to $1,132.3 million.

Genuine Parts — which shares space with LKQ Corporation (LKQ - Free Report) , Dorman Products (DORM - Free Report) and SPX Corporation (SPXC - Free Report)  — had cash and cash equivalents worth $990.1 million as of Dec 31 30, 2020. Long-term debt decreased to $2,516.6 million from $2,802.1 million recorded in the year-ago period.

Genuine Parts hiked dividend for the 65th consecutive year in 2021. Quarterly dividend of eighty-one and one-half cents per share is payable on April 1, 2021 to shareholders as of Mar 5, 2021. Expected annual payout of $3.26 per share in 2021 implies more than 3% increase from the previous dividend of $3.16.

Guidance

Genuine Parts — which presently carries a Zacks Rank #2 (Buy) — issued 2021 outlook. The company projects revenues from automotive and industrial sales to witness year-over-year uptick of 4-6% and 3-5%, respectively, in 2021. Full-year earnings are envisioned in the band of $5.55-$5.75 per share. Operating cash flow and capex are projected within $1-$1.2 billion and $275-$325 million, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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