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Why Is Genuine Parts (GPC) Down 15% Since Last Earnings Report?
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It has been about a month since the last earnings report for Genuine Parts (GPC - Free Report) . Shares have lost about 15% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Genuine Parts due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Genuine Parts Misses Q1 Earnings Estimates
Genuine Partsreported first-quarter 2026 adjusted earnings of $1.77 per share, which missed the Zacks Consensus Estimate of $1.81 by 1.94%. The bottom line improved 1.1% from the year-ago quarter’s adjusted earnings of $1.75 per share.
The company posted revenues of $6.27 billion, which beat the Zacks Consensus Estimate of $6.17 billion by 1.5% and increased 6.8% year over year. The performance was driven by solid sales growth across business segments and a 20-basis-point improvement in gross margin to 37.3%.
GPC Segment Sales Show Broad-Based Growth
North America Automotive sales rose 4.3% year over year to $2.36 billion. The increase reflected a 2.2% gain in comparable sales, a 1.6% benefit from acquisitions and a net 0.5% favorable impact of foreign currency and other. Segment EBITDA increased 6.3% to $156 million, while segment EBITDA margin improved 10 basis points to 6.6%.
International Automotive delivered the strongest top-line growth, with sales up 13.2% to $1.59 billion. This included a 0.3% increase in comparable sales, a 2.3% lift from acquisitions and a 10.6% favorable impact from foreign currency. Segment EBITDA improved 4.6% to $145 million, but segment EBITDA margin declined 80 basis points to 9.1%.
Industrial sales increased 5.2% to $2.32 billion, supported by a 3.9% rise in comparable sales, a 0.3% contribution from acquisitions and a 1.0% favorable foreign currency impact. Segment EBITDA climbed 12.7% to $314 million, and segment EBITDA margin expanded 90 basis points to 13.6%.
Genuine Parts Absorbs Restructuring and Separation Costs
On a GAAP basis, net income for the first quarter of 2026 was $189 million, or $1.37 per diluted share, compared with $194 million, or $1.40 per diluted share, in the year-ago period. The difference between GAAP and adjusted results primarily reflects costs tied to the company’s global restructuring initiative and separation planning.
Adjusted net income was $245 million compared with $243 million in the prior-year quarter.
GPC will split Global Automotive and Global Industrial into two independent, publicly traded companies, targeted for completion in the first quarter of 2027.
An incremental run-rate cost impact of $100-$150 million is expected, driven by standalone costs and dis-synergies. Dis-synergies are estimated to be in the band of $50-$75 million, split roughly evenly between Automotive and Industrial, while standalone costs of $50 million to $75 million are expected to fall largely within Industrial.
GPC Reaffirms 2026 Outlook and Capital Plans
GPC reaffirmed its full-year 2026 outlook, continuing to expect total sales growth of 3% to 5.5% and comparable sales growth of 2% to 4.5%. On the profitability front, the company maintained its view of 40 to 60 basis points of adjusted gross margin expansion and 30 to 50 basis points of adjusted SG&A leverage. It also reiterated its diluted EPS guidance of $6.10 to $6.60 and adjusted diluted EPS guidance of $7.50 to $8.00.
Cash flow expectations remained unchanged, with operating cash flow projected in the band of $1.0-$1.2 billion and free cash flow expected in the $550-$700 million range. For the first three months of 2026, operating cash flow totaled $64 million, while free cash flow was negative $34 million, reflecting continued investment and seasonally lower first-quarter cash generation.
Balance sheet discipline and capital allocation remained in focus. Total liquidity was $1.3 billion as of March 31, 2026, including $500 million in cash and $838 million of revolver capacity. During the quarter, GPC invested $98 million in capex and $14 million in acquisitions, while returning $142 million to shareholders via dividends. For 2026, the company targets $450-$500 million in capex and $300-$350 million in M&A, with approximately 7.5 million shares remaining under its repurchase authorization.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a flat trend in estimates revision.
VGM Scores
Currently, Genuine Parts has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock has a score of B on the value side, putting it in the second quintile for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Genuine Parts has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Genuine Parts (GPC) Down 15% Since Last Earnings Report?
It has been about a month since the last earnings report for Genuine Parts (GPC - Free Report) . Shares have lost about 15% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Genuine Parts due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Genuine Parts Misses Q1 Earnings Estimates
Genuine Parts reported first-quarter 2026 adjusted earnings of $1.77 per share, which missed the Zacks Consensus Estimate of $1.81 by 1.94%. The bottom line improved 1.1% from the year-ago quarter’s adjusted earnings of $1.75 per share.
The company posted revenues of $6.27 billion, which beat the Zacks Consensus Estimate of $6.17 billion by 1.5% and increased 6.8% year over year. The performance was driven by solid sales growth across business segments and a 20-basis-point improvement in gross margin to 37.3%.
GPC Segment Sales Show Broad-Based Growth
North America Automotive sales rose 4.3% year over year to $2.36 billion. The increase reflected a 2.2% gain in comparable sales, a 1.6% benefit from acquisitions and a net 0.5% favorable impact of foreign currency and other. Segment EBITDA increased 6.3% to $156 million, while segment EBITDA margin improved 10 basis points to 6.6%.
International Automotive delivered the strongest top-line growth, with sales up 13.2% to $1.59 billion. This included a 0.3% increase in comparable sales, a 2.3% lift from acquisitions and a 10.6% favorable impact from foreign currency. Segment EBITDA improved 4.6% to $145 million, but segment EBITDA margin declined 80 basis points to 9.1%.
Industrial sales increased 5.2% to $2.32 billion, supported by a 3.9% rise in comparable sales, a 0.3% contribution from acquisitions and a 1.0% favorable foreign currency impact. Segment EBITDA climbed 12.7% to $314 million, and segment EBITDA margin expanded 90 basis points to 13.6%.
Genuine Parts Absorbs Restructuring and Separation Costs
On a GAAP basis, net income for the first quarter of 2026 was $189 million, or $1.37 per diluted share, compared with $194 million, or $1.40 per diluted share, in the year-ago period. The difference between GAAP and adjusted results primarily reflects costs tied to the company’s global restructuring initiative and separation planning.
Adjusted net income was $245 million compared with $243 million in the prior-year quarter.
GPC will split Global Automotive and Global Industrial into two independent, publicly traded companies, targeted for completion in the first quarter of 2027.
An incremental run-rate cost impact of $100-$150 million is expected, driven by standalone costs and dis-synergies. Dis-synergies are estimated to be in the band of $50-$75 million, split roughly evenly between Automotive and Industrial, while standalone costs of $50 million to $75 million are expected to fall largely within Industrial.
GPC Reaffirms 2026 Outlook and Capital Plans
GPC reaffirmed its full-year 2026 outlook, continuing to expect total sales growth of 3% to 5.5% and comparable sales growth of 2% to 4.5%. On the profitability front, the company maintained its view of 40 to 60 basis points of adjusted gross margin expansion and 30 to 50 basis points of adjusted SG&A leverage. It also reiterated its diluted EPS guidance of $6.10 to $6.60 and adjusted diluted EPS guidance of $7.50 to $8.00.
Cash flow expectations remained unchanged, with operating cash flow projected in the band of $1.0-$1.2 billion and free cash flow expected in the $550-$700 million range. For the first three months of 2026, operating cash flow totaled $64 million, while free cash flow was negative $34 million, reflecting continued investment and seasonally lower first-quarter cash generation.
Balance sheet discipline and capital allocation remained in focus. Total liquidity was $1.3 billion as of March 31, 2026, including $500 million in cash and $838 million of revolver capacity. During the quarter, GPC invested $98 million in capex and $14 million in acquisitions, while returning $142 million to shareholders via dividends. For 2026, the company targets $450-$500 million in capex and $300-$350 million in M&A, with approximately 7.5 million shares remaining under its repurchase authorization.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a flat trend in estimates revision.
VGM Scores
Currently, Genuine Parts has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock has a score of B on the value side, putting it in the second quintile for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Genuine Parts has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.