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Genuine Parts Company (GPC - Free Report) delivered third-quarter 2023 adjusted earnings of $2.49 per share, up 11.6% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $2.40 per share. Higher-than-expected profit from the Industrial Parts segment resulted in the outperformance.
The company reported net sales of $5,824.6 million, lagging the Zacks Consensus Estimate of $5,888.4 million. The top line, however, rose 2.6% year over year. Year-over-year growth in revenues largely resulted from increased comparable sales across both segments and benefits from acquisitions and a net unfavorable impact of foreign currency translation.
Genuine Parts Company Price, Consensus and EPS Surprise
The Automotive segment’s net sales totaled $3,626.9 million in the reported quarter. The top line was up 3.9% year over year on the back of comparable sales growth, forex and acquisition benefits. The segment’s comparable sales rose 0.6% year over year. Operating profit increased 4.1% to $322 million but missed our forecast of $329 million. Segment profit margin came in at 8.9%, flat compared with the year-ago period.
The Industrial Parts segment’s net sales totaled $2,197.6 million. The top line rose by 0.6% 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 inched up 0.3% in the reported quarter. Operating profit rose 16.6% from the prior-year quarter to $283 million, beating our forecast of $255.8 million. The profit margin of 12.9% expanded 180 basis points year over year in the third quarter of 2023.
Financial Performance
Genuine Parts had cash and cash equivalents worth $654.6 million as of Sep 30, 2023, up from $653.5 million as of Dec 31, 2022. Long-term debt decreased to $2,963.4 million from $3,076.8 million as of Dec 31, 2022. The company exited the third quarter with $2.2 billion in total liquidity, comprising $1.5 billion on the revolving credit facility and the remainder as cash/cash equivalents. The company generated free cash flow of $481 million in the quarter under review.
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 earnings in the band of $9.20-$9.30 per share, up from the prior guidance of $9.15-$9.30 per share. The guidance for operating cash flow and FCF remains unchanged within $1.3-$1.4 billion and $900-$1,000 million, respectively.
Zacks Rank & Other Key Picks
GPC currently carries a Zacks Rank #2 (Buy).
A few other top-ranked players in the auto space include Allison Transmission Holdings (ALSN - Free Report) , Adient PLC (ADNT - Free Report) and PACCAR Inc. (PCAR - Free Report) .
The Zacks Consensus Estimate for ALSN’s 2023 sales and EPS implies year-over-year growth of 9.3% and 26.6%, respectively. The earnings estimate for 2023 has been revised upward by 1 cent in the past seven days. The consensus mark for 2024 sales and EPS implies year-over-year growth of 2% and 6%, respectively. Allison carries a Zacks Rank #1 (Strong Buy) currently and has a VGM Score of B.
The Zacks Consensus Estimate for ADNT’s fiscal 2023 sales and EPS implies year-over-year growth of 9% and 1,827%, respectively. The earnings estimate for the current fiscal has been revised upward by 4 cents in the past seven days. The consensus mark for fiscal 2024 sales and EPS implies year-over-year growth of 3.4% and 74%, respectively. Adient sports a Zacks Rank #1 and has a VGM Score of A.
The Zacks Consensus Estimate for PCAR’s 2023 sales and EPS implies year-over-year growth of 19.2% and 49%, respectively. Over the past 30 days, PACCAR’s earnings estimate for 2023 and 2024 has been revised upward by 2 cents and 13 cents, respectively. The stock currently carries a Zacks Rank #2 and has a VGM Score of A.
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Genuine Parts' (GPC) Q3 Earnings Maintain Beat Streak
Genuine Parts Company (GPC - Free Report) delivered third-quarter 2023 adjusted earnings of $2.49 per share, up 11.6% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $2.40 per share. Higher-than-expected profit from the Industrial Parts segment resulted in the outperformance.
The company reported net sales of $5,824.6 million, lagging the Zacks Consensus Estimate of $5,888.4 million. The top line, however, rose 2.6% year over year. Year-over-year growth in revenues largely resulted from increased comparable sales across both segments and benefits from acquisitions and a net 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 $3,626.9 million in the reported quarter. The top line was up 3.9% year over year on the back of comparable sales growth, forex and acquisition benefits. The segment’s comparable sales rose 0.6% year over year. Operating profit increased 4.1% to $322 million but missed our forecast of $329 million. Segment profit margin came in at 8.9%, flat compared with the year-ago period.
The Industrial Parts segment’s net sales totaled $2,197.6 million. The top line rose by 0.6% 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 inched up 0.3% in the reported quarter. Operating profit rose 16.6% from the prior-year quarter to $283 million, beating our forecast of $255.8 million. The profit margin of 12.9% expanded 180 basis points year over year in the third quarter of 2023.
Financial Performance
Genuine Parts had cash and cash equivalents worth $654.6 million as of Sep 30, 2023, up from $653.5 million as of Dec 31, 2022. Long-term debt decreased to $2,963.4 million from $3,076.8 million as of Dec 31, 2022. The company exited the third quarter with $2.2 billion in total liquidity, comprising $1.5 billion on the revolving credit facility and the remainder as cash/cash equivalents. The company generated free cash flow of $481 million in the quarter under review.
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 earnings in the band of $9.20-$9.30 per share, up from the prior guidance of $9.15-$9.30 per share. The guidance for operating cash flow and FCF remains unchanged within $1.3-$1.4 billion and $900-$1,000 million, respectively.
Zacks Rank & Other Key Picks
GPC currently carries a Zacks Rank #2 (Buy).
A few other top-ranked players in the auto space include Allison Transmission Holdings (ALSN - Free Report) , Adient PLC (ADNT - Free Report) and PACCAR Inc. (PCAR - Free Report) .
The Zacks Consensus Estimate for ALSN’s 2023 sales and EPS implies year-over-year growth of 9.3% and 26.6%, respectively. The earnings estimate for 2023 has been revised upward by 1 cent in the past seven days. The consensus mark for 2024 sales and EPS implies year-over-year growth of 2% and 6%, respectively. Allison carries a Zacks Rank #1 (Strong Buy) currently and has a VGM Score of B.
The Zacks Consensus Estimate for ADNT’s fiscal 2023 sales and EPS implies year-over-year growth of 9% and 1,827%, respectively. The earnings estimate for the current fiscal has been revised upward by 4 cents in the past seven days. The consensus mark for fiscal 2024 sales and EPS implies year-over-year growth of 3.4% and 74%, respectively. Adient sports a Zacks Rank #1 and has a VGM Score of A.
The Zacks Consensus Estimate for PCAR’s 2023 sales and EPS implies year-over-year growth of 19.2% and 49%, respectively. Over the past 30 days, PACCAR’s earnings estimate for 2023 and 2024 has been revised upward by 2 cents and 13 cents, respectively. The stock currently carries a Zacks Rank #2 and has a VGM Score of A.
You can see the complete list of today’s Zacks #1 Rank stocks here.