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Genuine Parts Company (GPC - Free Report) reported second-quarter 2022 adjusted earnings of $2.20 per share, up 26.4% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $2.02 per share. Higher-than-expected sales and operating profits across both its segments resulted in this outperformance.
The company reported net sales of $5,602.4 million, outpacing the Zacks Consensus Estimate of $5,265.8 million. The top line rose 17.1% year over year. The upside resulted from 11.5% growth in comparable sales and 8.8% 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 $3,467.5 million for the reported quarter, surpassing the Zacks Consensus Estimate of $3,254 million. The top line was also up 8.5% year over year on the back of comparable sales growth and acquisition benefits. The segment’s comparable sales rose 8.4% year over year for the second quarter. Operating profit increased 10.9% year over year to $323 million and topped the consensus mark of $273 million.Segment profit margin came in at 9.3%, up 20 basis points from the year-ago period.
The Industrial Parts segment’s net sales totaled $2,134 million, surpassing the consensus estimate of $1,889 million. The top line also increased 34.5% year over year on comparable sales growth and acquisition benefits. The sales growth reflects a 17.6% contribution from the buyout of Kaman Distribution Group. The segment’s comparable sales climbed 17.8% for the reported quarter. Operating profit climbed 49.9% from the prior-year quarter to $225 million, which beat the consensus mark of $171 million. The profit margin of 10.6% expanded 110 basis points from the second quarter of 2021.
Financial Performance
Genuine Parts had cash and cash equivalents worth $519.1 million as of Jun 30, 2022. The company exited the second quarter with $2 billion in total liquidity, comprising $1.5 billion on the revolving credit facility and remaining as cash/cash equivalents. Long-term debt increased to $3,304.2 million from $2,473 million recorded as of Jun 30, 2021. The company generated a free cash flow of $638 million in the first half of 2022.
2022 Guidance Raised
Genuine Parts projects revenues from automotive and industrial sales to witness a year-over-year uptick of 6-8% and 26-28%, up from the prior expected growth of 5-7% and 21-23%, respectively. Overall sales growth is projected in the range of 12-14%, up from the prior growth view of 10-12%. Full-year adjusted earnings per share are envisioned in the band of $7.80-$7.95, higher than the previous forecast of $7.70-$7.85. The guidance for operating cash flow and FCF remains unchanged within $1.5-$1.7 billion and $1.2-$1.4 billion, respectively.
Switzerland-based Garrett designs, manufactures, and sells turbocharger and electric-boosting technologies. The Zacks Consensus Estimate for GTX’s 2022 earnings and sales implies year-over-year growth of 6.7% and 1.8%, respectively. The consensus mark for 2022 earnings has been revised upward by 5 cents in the past 60 days. Over the trailing four quarters, Garrett surpassed earnings estimates twice for as many misses, the average being 75.4%.
Ohio-based Commercial Vehicle Group supplies interior systems, vision safety solutions and other cab-related products for the global commercial vehicle market, including the heavy-duty (Class 8) truck market, the construction market and other specialized transportation markets. The Zacks Consensus Estimate for CVGI’s 2022 earnings and sales implies year-over-year growth of 6.2% and 2.6%, respectively. The consensus mark for 2022 earnings has been revised upward by 10 cents in the past 30 days.
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Genuine Parts' (GPC) Q2 Earnings Maintain Beat Streak
Genuine Parts Company (GPC - Free Report) reported second-quarter 2022 adjusted earnings of $2.20 per share, up 26.4% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $2.02 per share. Higher-than-expected sales and operating profits across both its segments resulted in this outperformance.
The company reported net sales of $5,602.4 million, outpacing the Zacks Consensus Estimate of $5,265.8 million. The top line rose 17.1% year over year. The upside resulted from 11.5% growth in comparable sales and 8.8% 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 $3,467.5 million for the reported quarter, surpassing the Zacks Consensus Estimate of $3,254 million. The top line was also up 8.5% year over year on the back of comparable sales growth and acquisition benefits. The segment’s comparable sales rose 8.4% year over year for the second quarter. Operating profit increased 10.9% year over year to $323 million and topped the consensus mark of $273 million.Segment profit margin came in at 9.3%, up 20 basis points from the year-ago period.
The Industrial Parts segment’s net sales totaled $2,134 million, surpassing the consensus estimate of $1,889 million. The top line also increased 34.5% year over year on comparable sales growth and acquisition benefits. The sales growth reflects a 17.6% contribution from the buyout of Kaman Distribution Group. The segment’s comparable sales climbed 17.8% for the reported quarter. Operating profit climbed 49.9% from the prior-year quarter to $225 million, which beat the consensus mark of $171 million. The profit margin of 10.6% expanded 110 basis points from the second quarter of 2021.
Financial Performance
Genuine Parts had cash and cash equivalents worth $519.1 million as of Jun 30, 2022. The company exited the second quarter with $2 billion in total liquidity, comprising $1.5 billion on the revolving credit facility and remaining as cash/cash equivalents. Long-term debt increased to $3,304.2 million from $2,473 million recorded as of Jun 30, 2021. The company generated a free cash flow of $638 million in the first half of 2022.
2022 Guidance Raised
Genuine Parts projects revenues from automotive and industrial sales to witness a year-over-year uptick of 6-8% and 26-28%, up from the prior expected growth of 5-7% and 21-23%, respectively. Overall sales growth is projected in the range of 12-14%, up from the prior growth view of 10-12%. Full-year adjusted earnings per share are envisioned in the band of $7.80-$7.95, higher than the previous forecast of $7.70-$7.85. 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). A few better-ranked players in the auto space include Garrett Motion (GTX - Free Report) and Commercial Vehicle Group (CVGI - Free Report) . Both these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Switzerland-based Garrett designs, manufactures, and sells turbocharger and electric-boosting technologies. The Zacks Consensus Estimate for GTX’s 2022 earnings and sales implies year-over-year growth of 6.7% and 1.8%, respectively. The consensus mark for 2022 earnings has been revised upward by 5 cents in the past 60 days. Over the trailing four quarters, Garrett surpassed earnings estimates twice for as many misses, the average being 75.4%.
Ohio-based Commercial Vehicle Group supplies interior systems, vision safety solutions and other cab-related products for the global commercial vehicle market, including the heavy-duty (Class 8) truck market, the construction market and other specialized transportation markets. The Zacks Consensus Estimate for CVGI’s 2022 earnings and sales implies year-over-year growth of 6.2% and 2.6%, respectively. The consensus mark for 2022 earnings has been revised upward by 10 cents in the past 30 days.