Genuine Parts Company (GPC - Free Report) reported adjusted earnings of $1.59 per share, beating the Zacks Consensus Estimate of $1.56. Adjusted earnings per share in the year-ago quarter were $1.29.
The company recorded net income of $227 million in second-quarter 2018, up from $190 million in the prior-year quarter
Genuine Parts reported net sales of $4.82 billion, up 17.6% year over year. The figure surpassed the Zacks Consensus Estimate of $4.66 billion. The rise was driven by acquisitions and improved organic sales. Total sales included 3% comparable growth, 14% from acquisitions — including Alliance Automotive Group (“AAG”), and 0.5% benefit from the foreign currency translation.
Genuine Parts Company Price, Consensus and EPS Surprise
Operating profit increased to $390.2 million from $349.2 million in second-quarter 2017. Selling, administrative and other expenses rose to $1.16 billion from $903.3 million a year ago.
Revenues from the Automotive group’s net sales improved 27.7% to $2.74 billion from the year-ago figure of $2.14 billion. Moreover, the group’s operating profit rose to $243.6 million in the reported quarter from $207.3 million a year ago.
The Industrial Parts group’s net sales rose 8.7% year over year to $1.6 billion. Moreover, operating profit increased to $125.2 million from $111.8 million in the year-ago quarter.
The Business Products group’s net sales were almost in line with $483 million recorded in the prior-year quarter. However, operating profit at the segment declined to $21.4 million from $30 million recorded in the prior-year quarter.
Genuine Parts had cash and cash equivalents of $355 million as of Jun 30, 2018, up from $203 million as of Jun 30, 2017. At the end of the first half of 2018, long-term debt increased to $2.5 billion from $550 million as of Jun 30, 2017.
In second-quarter 2018, capital expenditure increased to $33.5 million from $29.3 million in the year-ago quarter.
For full-year 2018, Genuine Parts raised the sales growth-rate expectation to 13-14% from the previous expectation of 12-13%. The company reiterated its adjusted earnings per share expectation of $5.6-$5.75.
Zacks Rank & Key Picks
Genuine Parts currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) , Oshkosh Corporation (OSK - Free Report) and Visteon Corporation (VC - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
American Axle has an expected long-term growth rate of 8.1%. Over a year, shares of the company have gained 3.1%.
Oshkosh has an expected long-term growth rate of 18.3%. Shares of the company have risen 6.6% in the past year.
Visteon has an expected long-term growth rate of 15%. Over a year, shares of the company have gained 18.4%.
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