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Why Is Genuine Parts (GPC) Up 5.1% Since Its Last Earnings Report?
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A month has gone by since the last earnings report for Genuine Parts Company (GPC - Free Report) . Shares have added about 5.1% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is GPC due for a pullback? 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 Q1 Earnings Miss, Revenues Top Estimates
Genuine Parts reported adjusted earnings of $1.27 per share, missing the Zacks Consensus Estimate of $1.32. Adjusted earnings per share in the year-ago quarter were $1.08.
The company recorded net income of $176.6 million in first-quarter 2018, up from $160.2 million in the prior-year quarter.
Genuine Parts reported net sales of $4.59 billion, up 17% year over year. The figure surpassed the Zacks Consensus Estimate of $4.5 billion. The rise was driven by its global automotive and industrial businesses. Total sales included 2% organic growth, 14% from acquisitions -- including AAG-- and 1% benefit from foreign currency translation.
Operating profit increased to $318.5 million from $286.9 million in first-quarter 2017. Selling, administrative and other expenses rose to $1.1 billion from $874 million a year ago.
Segment Results
Revenues from the Automotive group’s net sales improved 29.6% to $2.6 billion from the year-ago figure of $2 billion. Moreover, the group’s operating profit rose to $184.7 million in the reported quarter from $151.8 million a year ago.
Effective Jan 1, 2018, the company’s Electrical/electronic material segment became a division of the Industrial segment. Further, results of both the segments were reported under the Industrial Parts Group. The Industrial Parts group’s net sales rose 8.3% year over year to $1.55 billion. Operating profit, however, increased to $112 million from $104 million in the year-ago quarter.
The S. P. Richards or Business Products group’s net sales declined 4.8% to $474 million. Operating profit at the segment declined to $21.6 million from $31.1 million, recorded in the prior-year quarter.
Financial Position
Genuine Parts had cash and cash equivalents of $326 million as of Mar 31, 2018, up from $178 million as of Mar 31, 2017. Long-term debt increased to $2.6 billion as of Mar 31, 2018, from $550 million as of Mar 31, 2017.
In first-quarter 2018, capital expenditures increased to $31.6 million from $24.8 million in the year-ago quarter.
Guidance
For full-year 2018, Genuine Parts reiterated sales growth-rate expectation of 12-13% and adjusted earnings per share expectation of $5.6-$5.75.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared with two lower.
At this time, GPC has a strong Growth Score of A, though it is lagging a lot on the momentum front with a C. The stock was also allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
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.
Based on our scores, the stock is more suitable for growth investors than those looking for value and momentum.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. It's no surprise GPC 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) Up 5.1% Since Its Last Earnings Report?
A month has gone by since the last earnings report for Genuine Parts Company (GPC - Free Report) . Shares have added about 5.1% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is GPC due for a pullback? 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 Q1 Earnings Miss, Revenues Top Estimates
Genuine Parts reported adjusted earnings of $1.27 per share, missing the Zacks Consensus Estimate of $1.32. Adjusted earnings per share in the year-ago quarter were $1.08.
The company recorded net income of $176.6 million in first-quarter 2018, up from $160.2 million in the prior-year quarter.
Genuine Parts reported net sales of $4.59 billion, up 17% year over year. The figure surpassed the Zacks Consensus Estimate of $4.5 billion. The rise was driven by its global automotive and industrial businesses. Total sales included 2% organic growth, 14% from acquisitions -- including AAG-- and 1% benefit from foreign currency translation.
Operating profit increased to $318.5 million from $286.9 million in first-quarter 2017. Selling, administrative and other expenses rose to $1.1 billion from $874 million a year ago.
Segment Results
Revenues from the Automotive group’s net sales improved 29.6% to $2.6 billion from the year-ago figure of $2 billion. Moreover, the group’s operating profit rose to $184.7 million in the reported quarter from $151.8 million a year ago.
Effective Jan 1, 2018, the company’s Electrical/electronic material segment became a division of the Industrial segment. Further, results of both the segments were reported under the Industrial Parts Group. The Industrial Parts group’s net sales rose 8.3% year over year to $1.55 billion. Operating profit, however, increased to $112 million from $104 million in the year-ago quarter.
The S. P. Richards or Business Products group’s net sales declined 4.8% to $474 million. Operating profit at the segment declined to $21.6 million from $31.1 million, recorded in the prior-year quarter.
Financial Position
Genuine Parts had cash and cash equivalents of $326 million as of Mar 31, 2018, up from $178 million as of Mar 31, 2017. Long-term debt increased to $2.6 billion as of Mar 31, 2018, from $550 million as of Mar 31, 2017.
In first-quarter 2018, capital expenditures increased to $31.6 million from $24.8 million in the year-ago quarter.
Guidance
For full-year 2018, Genuine Parts reiterated sales growth-rate expectation of 12-13% and adjusted earnings per share expectation of $5.6-$5.75.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared with two lower.
Genuine Parts Company Price and Consensus
Genuine Parts Company Price and Consensus | Genuine Parts Company Quote
VGM Scores
At this time, GPC has a strong Growth Score of A, though it is lagging a lot on the momentum front with a C. The stock was also allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
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.
Based on our scores, the stock is more suitable for growth investors than those looking for value and momentum.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. It's no surprise GPC has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.