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Genuine Parts (GPC) Tops Q1 Earnings Mark, Lifts '22 View
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Genuine Parts Company (GPC - Free Report) reported first-quarter 2022 adjusted earnings of $1.86 per share, up 24% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $1.70 per share. Higher-than-expected sales and operating profits across both its segments resulted in this outperformance.
The company reported net sales of $5,294.6 million, surpassing the Zacks Consensus Estimate of $5,131 million. The top line is also higher than the year-ago quarter’s $4,465 million. The upside resulted from 12.3% growth in comparable sales and 8.1% benefit from acquisitions, partly offset by an unfavorable impact of foreign currency translation.
Genuine Parts Company Price, Consensus and EPS Surprise
The Automotive segment’s net sales totaled $3,275.6 million for the reported quarter, surpassing the Zacks Consensus Estimate of $3,219 million. The top line was also up 10.9% year over year on the back of comparable sales growth and acquisition benefits. The segment’s comparable sales rose 10.3% year over year for the first quarter. Operating profit increased 12.3% year over year to $264.6 million and topped the consensus mark of $234 million.
The Industrial Parts segment’s net sales totaled $2,019 million, surpassing the consensus estimate of $1,912 million. The top line also increased 33.6% year over year on comparable sales growth and acquisition benefits. The sales growth reflects an 18% contribution from the buyout of Kaman Distribution Group. The segment’s comparable sales climbed 16.1% for the reported quarter. Operating profit climbed 50.3% from the prior-year quarter to $188.4 million, which beat the consensus mark of $155 million.
Financial Performance
Genuine Parts had cash and cash equivalents worth $610.7 million as of Mar 31, 2022. Long-term debt increased to $3,387.8 million from $2,458 million recorded as of Mar 31, 2021. The company generated a free cash flow of $320.7 million in 2021.
2022 Guidance Raised
Genuine Parts projects revenues from automotive and industrial sales to witness a year-over-year uptick of 5-7% and 21-23%, respectively. Overall sales growth is projected in the range of 10-12%, up from the prior growth view of 9-11%. Full-year adjusted earnings per share are envisioned in the band of $7.70-$7.85, higher than the previous forecast of $7.45-$7.60. The guidance for operating cash flow and FCF remains unchanged within $1.5-$1.7 billion and $1.2-$1.4 billion, respectively.
Zacks Rank & Key Picks
Genuine Parts currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the auto space include AutoNation (AN - Free Report) , Group 1 Automotive (GPI - Free Report) and Penske Automotive (PAG - Free Report) . All three companies are noteworthy names in the auto retail industry. While AN flaunts a Zacks Rank #1 (Strong Buy), GPI and PAG carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AutoNation’s strong footprint, large dealer network, enhanced digital solutions, aggressive store expansion efforts and brand extension strategy are praiseworthy. Acquisitions of Peacock Automotive Group and Priority 1 have buoyed AutoNation’s portfolio. A strong liquidity profile and investor-friendly moves instill optimism. The Zacks Consensus Estimate for AutoNation’s 2022 earnings and sales implies year-over-year growth of 11.1% and 5.2%, respectively.
Group 1’s acquisition of dealerships and franchises to expand and optimize its portfolio is likely to boost the firm’s prospects. In 2021, Group 1 completed transactions representing $2.5 billion of acquired revenues. The company’s frequent dividend hikes and robust share buyback program boost shareholder confidence. GPI’s online retailing initiative — the AcceleRide platform — is also buoying prospects. The Zacks Consensus Estimate for Group 1’s 2022 earnings and sales implies year-over-year growth of 10% and 17.5%, respectively.
Penske is riding high on strategic acquisitions. It has become the largest dealership group for Freightliner in North America with the Warner Truck Centers buyout. Acquisitions of Kansas City Freightliner and McCoy are also boosting Penske’s top line. The Penske Transportation Solutions joint venture, in which PAG holds a 28.9% stake, is also driving the firm’s growth. Management is also committed to maximize shareholder value via dividends and buybacks. The Zacks Consensus Estimate for Penske’s 2022 and 2023 sales implies year-over-year growth of 4.5% and 1.6%, respectively.
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Genuine Parts (GPC) Tops Q1 Earnings Mark, Lifts '22 View
Genuine Parts Company (GPC - Free Report) reported first-quarter 2022 adjusted earnings of $1.86 per share, up 24% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $1.70 per share. Higher-than-expected sales and operating profits across both its segments resulted in this outperformance.
The company reported net sales of $5,294.6 million, surpassing the Zacks Consensus Estimate of $5,131 million. The top line is also higher than the year-ago quarter’s $4,465 million. The upside resulted from 12.3% growth in comparable sales and 8.1% benefit from acquisitions, partly offset by an unfavorable impact of foreign currency translation.
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 totaled $3,275.6 million for the reported quarter, surpassing the Zacks Consensus Estimate of $3,219 million. The top line was also up 10.9% year over year on the back of comparable sales growth and acquisition benefits. The segment’s comparable sales rose 10.3% year over year for the first quarter. Operating profit increased 12.3% year over year to $264.6 million and topped the consensus mark of $234 million.
The Industrial Parts segment’s net sales totaled $2,019 million, surpassing the consensus estimate of $1,912 million. The top line also increased 33.6% year over year on comparable sales growth and acquisition benefits. The sales growth reflects an 18% contribution from the buyout of Kaman Distribution Group. The segment’s comparable sales climbed 16.1% for the reported quarter. Operating profit climbed 50.3% from the prior-year quarter to $188.4 million, which beat the consensus mark of $155 million.
Financial Performance
Genuine Parts had cash and cash equivalents worth $610.7 million as of Mar 31, 2022. Long-term debt increased to $3,387.8 million from $2,458 million recorded as of Mar 31, 2021. The company generated a free cash flow of $320.7 million in 2021.
2022 Guidance Raised
Genuine Parts projects revenues from automotive and industrial sales to witness a year-over-year uptick of 5-7% and 21-23%, respectively. Overall sales growth is projected in the range of 10-12%, up from the prior growth view of 9-11%. Full-year adjusted earnings per share are envisioned in the band of $7.70-$7.85, higher than the previous forecast of $7.45-$7.60. The guidance for operating cash flow and FCF remains unchanged within $1.5-$1.7 billion and $1.2-$1.4 billion, respectively.
Zacks Rank & Key Picks
Genuine Parts currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the auto space include AutoNation (AN - Free Report) , Group 1 Automotive (GPI - Free Report) and Penske Automotive (PAG - Free Report) . All three companies are noteworthy names in the auto retail industry. While AN flaunts a Zacks Rank #1 (Strong Buy), GPI and PAG carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AutoNation’s strong footprint, large dealer network, enhanced digital solutions, aggressive store expansion efforts and brand extension strategy are praiseworthy. Acquisitions of Peacock Automotive Group and Priority 1 have buoyed AutoNation’s portfolio. A strong liquidity profile and investor-friendly moves instill optimism. The Zacks Consensus Estimate for AutoNation’s 2022 earnings and sales implies year-over-year growth of 11.1% and 5.2%, respectively.
Group 1’s acquisition of dealerships and franchises to expand and optimize its portfolio is likely to boost the firm’s prospects. In 2021, Group 1 completed transactions representing $2.5 billion of acquired revenues. The company’s frequent dividend hikes and robust share buyback program boost shareholder confidence. GPI’s online retailing initiative — the AcceleRide platform — is also buoying prospects. The Zacks Consensus Estimate for Group 1’s 2022 earnings and sales implies year-over-year growth of 10% and 17.5%, respectively.
Penske is riding high on strategic acquisitions. It has become the largest dealership group for Freightliner in North America with the Warner Truck Centers buyout. Acquisitions of Kansas City Freightliner and McCoy are also boosting Penske’s top line. The Penske Transportation Solutions joint venture, in which PAG holds a 28.9% stake, is also driving the firm’s growth. Management is also committed to maximize shareholder value via dividends and buybacks. The Zacks Consensus Estimate for Penske’s 2022 and 2023 sales implies year-over-year growth of 4.5% and 1.6%, respectively.