Back to top

Image: Bigstock

Genuine Parts (GPC) Beats Q3 Earnings Estimates, Tweaks View

Read MoreHide Full Article

Genuine Parts Company (GPC - Free Report) reported adjusted earnings of $1.50 per share in third-quarter 2019, surpassing the Zacks Consensus Estimate of $1.47. Following the company’s better-than-expected earnings, Genuine Parts' share price moved up 1.23% to close at $98.93 on Oct 18.

Notably, strategic buyouts of PartsPoint, Inenco and Alliance Automotive Group drove the results. The bottom line also improved from the year-ago profit of $1.48 a share.

Genuine Parts reported net sales of $5,015 million, marginally missing the Zacks Consensus Estimate of $5,026 million. The top line, however, increased 6.2% year over year. Net sales included 1.2% comparable growth, roughly 6.7% from acquisitions, partly offset by adverse impact of 1% due to foreign currency translation and 0.7% attributable to the sale of Grupo Auto Todo.

Genuine Parts Company Price, Consensus and EPS Surprise


Genuine Parts Company Price, Consensus and EPS Surprise

Genuine Parts Company price-consensus-eps-surprise-chart | Genuine Parts Company Quote

Segmental Results

The Automotive segment’s net sales came in at $2,790 million, up 5.3% year over year. The segment’s comparable sales growth was 1.8% during the quarter. Acquisition of PartsPoint and Inenco drove the automotive unit’s sales. However, the segment’s operating profit declined to $222.1 million in the reported quarter from $226.7 million a year ago.

The Industrial Parts segment’s net sales rose 9.8% from the year-ago quarter to $1,732.8 million, aided by buyout benefits. The segment’s comps growth was 0.9%. Resultantly, operating profit increased to $137.5 million from $119.2 million in the year-ago quarter.

The Business Products segment’s net sales fell to $491.5 million from $495.8 million recorded in the prior-year quarter. Nonetheless, operating profit from the segment rose to $21.6 million from $19.8 million recorded in the prior-year quarter.

Financial Position

Genuine Parts had cash and cash equivalents of $451.3 million as of Sep 30, 2019, up from $359.1 million in the corresponding period of 2018. As of Sep 30, 2019, its long-term debt increased to $2.8 billion from $2.4 billion in the comparable year-ago period. The company’s debt-to-capital ratio stands at 43.2%.

2019 Guidance Updated

Considering the impact of the sale of the Electrical Specialties Group of Motion Industries, the company downwardly revised its guidance. It now expects sales to increase 3.5% versus the prior view of 4.5-5.5% growth. The company currently expects adjusted earnings per share within $5.60-$5.68 compared with the previous forecast of $5.65-$5.75.

Zacks Rank and Other Stocks to Consider

Genuine Parts currently has a Zacks Rank #2 (Buy). Other top-ranked stocks in the auto space include Veoneer, Inc. VNE, Standard Motor Products, Inc. SMP and Tesla TSLA, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.

See 7 breakthrough stocks now>>

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Genuine Parts Company (GPC) - free report >>