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Genuine Parts (GPC) Q2 Earnings Top, '23 EPS View Raised
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Genuine Parts Company (GPC - Free Report) delivered second-quarter 2023 adjusted earnings of $2.44 per share, up 10.9% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $2.33 per share. High year-over-year operating profits across the Automotive segment and Industrial Parts segment resulted in the outperformance.
The company reported net sales of $5,915 million, lagging the Zacks Consensus Estimate of $5,938 million. The top line, however, rose 5.6% year over year. Year-over-year growth in revenues resulted from increased comparable sales across both segments and benefits from acquisitions, partly offset by a net unfavorable impact of foreign currency translation to the tune of 1.1%.
Genuine Parts Company Price, Consensus and EPS Surprise
The Automotive segment’s net sales totaled $3,655 million in the reported quarter. The top line was up 5.4% year over year on the back of comparable sales growth and acquisition benefits, offset by a net unfavorable impact of foreign currency translation.
The segment’s comparable sales rose 4.3% year over year. Operating profit increased 2.1% to $329 million, topping our forecast of $299 million. Segment profit margin came in at 9%, down 30 basis points from the year-ago period.
The Industrial Parts segment’s net sales totaled $2,260 million, surpassing our projection of $2,165.7 million. The top line rose by 5.9% 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 climbed 6% in the reported quarter. Operating profit rose 25.7% from the prior-year quarter to $283 million, beating our forecast of $239.7 million. The profit margin of 12.5% expanded by 190 basis points in the second quarter of 2023.
Financial Performance
Genuine Parts had cash and cash equivalents worth $530.1 million as of Jun 30, 2023, down from $653.5 million as of Dec 31, 2022.
The company exited the second quarter with $2 billion in total liquidity, comprising $1.4 billion on the revolving credit facility and the remainder as cash/cash equivalents.
Long-term debt decreased to $2,986 million from $3,077 million as of Dec 31, 2022.
The company generated free cash flow of $251.7 million for the six months ended Jun 30, 2023.
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 diluted earnings in the band of $9.15-$9.30 per share, up from the prior guidance of $8.95-$9.10 per share. The guidance for operating cash flow and FCF is within $1.3-$1.4 billion and $900-$1,000 million, respectively, similar to the previous guidance.
Zacks Rank & Key Picks
Genuine Parts currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for AXL’s 2023 sales implies year-over-year growth of 4.6%. The 2023 EPS estimate has been revised upward by 6 cents in the past 90 days. The EPS estimate for 2024 has moved north by a cent in 60 days.
The Zacks Consensus Estimate for STLA’s 2023 sales implies year-over-year growth of 17.6%. The EPS estimate for 2023 has moved north by 2 cents in the past seven days. The 2023 EPS estimate has been revised upward by 3 cents in the past seven days.
The Zacks Consensus Estimate for F’s 2023 sales implies year-over-year growth of 6.6%. The 2023 EPS estimate has been revised upward by 4 cents in the past 30 days. The EPS estimate for 2024 has moved north by 3 cents in the past 30 days.
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Genuine Parts (GPC) Q2 Earnings Top, '23 EPS View Raised
Genuine Parts Company (GPC - Free Report) delivered second-quarter 2023 adjusted earnings of $2.44 per share, up 10.9% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $2.33 per share. High year-over-year operating profits across the Automotive segment and Industrial Parts segment resulted in the outperformance.
The company reported net sales of $5,915 million, lagging the Zacks Consensus Estimate of $5,938 million. The top line, however, rose 5.6% year over year. Year-over-year growth in revenues resulted from increased comparable sales across both segments and benefits from acquisitions, partly offset by a net unfavorable impact of foreign currency translation to the tune of 1.1%.
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 $3,655 million in the reported quarter. The top line was up 5.4% year over year on the back of comparable sales growth and acquisition benefits, offset by a net unfavorable impact of foreign currency translation.
The segment’s comparable sales rose 4.3% year over year. Operating profit increased 2.1% to $329 million, topping our forecast of $299 million. Segment profit margin came in at 9%, down 30 basis points from the year-ago period.
The Industrial Parts segment’s net sales totaled $2,260 million, surpassing our projection of $2,165.7 million. The top line rose by 5.9% 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 climbed 6% in the reported quarter. Operating profit rose 25.7% from the prior-year quarter to $283 million, beating our forecast of $239.7 million. The profit margin of 12.5% expanded by 190 basis points in the second quarter of 2023.
Financial Performance
Genuine Parts had cash and cash equivalents worth $530.1 million as of Jun 30, 2023, down from $653.5 million as of Dec 31, 2022.
The company exited the second quarter with $2 billion in total liquidity, comprising $1.4 billion on the revolving credit facility and the remainder as cash/cash equivalents.
Long-term debt decreased to $2,986 million from $3,077 million as of Dec 31, 2022.
The company generated free cash flow of $251.7 million for the six months ended Jun 30, 2023.
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 diluted earnings in the band of $9.15-$9.30 per share, up from the prior guidance of $8.95-$9.10 per share. The guidance for operating cash flow and FCF is within $1.3-$1.4 billion and $900-$1,000 million, respectively, similar to the previous guidance.
Zacks Rank & Key Picks
Genuine Parts currently carries a Zacks Rank #2 (Buy).
A few other top-ranked players in the auto space include American Axle & Manufacturing Holdings (AXL - Free Report) , Stellantis N.V. (STLA - Free Report) and Ford Motor Company (F - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AXL’s 2023 sales implies year-over-year growth of 4.6%. The 2023 EPS estimate has been revised upward by 6 cents in the past 90 days. The EPS estimate for 2024 has moved north by a cent in 60 days.
The Zacks Consensus Estimate for STLA’s 2023 sales implies year-over-year growth of 17.6%. The EPS estimate for 2023 has moved north by 2 cents in the past seven days. The 2023 EPS estimate has been revised upward by 3 cents in the past seven days.
The Zacks Consensus Estimate for F’s 2023 sales implies year-over-year growth of 6.6%. The 2023 EPS estimate has been revised upward by 4 cents in the past 30 days. The EPS estimate for 2024 has moved north by 3 cents in the past 30 days.