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Genuine Parts (GPC) Q4 Earnings & Revenues Surpass Estimates

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Genuine Parts Company GPC reported adjusted earnings of $1.35 per share in fourth-quarter 2019, beating the Zacks Consensus Estimate of $1.31. The Automotive segment’s better-than-expected results drove this outperformance. The segment’s net sales came in at $2,799.8 million in the quarter, surpassing the Zacks Consensus Estimate of $2,718 million. The bottom line came in line with the year-ago profit of $1.35 a share.

Genuine Parts reported net sales of $4,706 million, outpacing the Zacks Consensus Estimate of $4,688 million. The top line, however, increased 2.2% year over year. Net sales included 0.5% comparable growth, 6.7% from acquisitions, partly offset by a 4.2% decline due to the sale of EIS, Inc (EIS) and Grupo Auto Todo, and 0.8% negative impact from foreign-currency translation.

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 $2,799.8 million, up 8.7% year over year. The segment’s comparable sales registered 12.9% growth during the fourth quarter. The segment’s operating profit increased to $200.6 million in the reported quarter from the prior year’s $199.3 million.

The Industrial Parts segment’s net sales slid 5.9% from the year-ago quarter to $1,478.3 million. The segment’s comparable sales declined 5.9%. Resultantly, operating profit decreased to $126.9 million from the year-earlier quarter’s $130.8 million.

The Business Products segment’s net sales fell to $428 million from the $456.8 million recorded in the prior-year quarter. Operating profit of the segment fell to $14 million from the $25.8 million recorded in the prior-year period.

Financial Position

Genuine Parts had cash and cash equivalents of $276.9 million as of Dec 31, 2019, down from $333.5 million in the corresponding period of 2018. As of Dec 31, 2019, its long-term debt increased to $2,802 million from the $2,432.1 million witnessed in the year-ago period. The company’s debt-to-capital ratio was 48.1% as of Dec 31, 2019.

Dividend

On Feb 18, Genuine Parts announced a 4% increase in the regular quarterly cash dividend for 2020, marking the 64th consecutive year of increased dividends paid to shareholders. The board approved a cash dividend of 79 cents per share to be paid on Apr 1, to shareholders of record as of Mar 6, 2020.

2020 Outlook

For full-year 2020, the company expects total sales growth of 3-4%. The company currently expects adjusted earnings per share within $5.80-$5.90 in 2020. Capital expenditures are projected at $275-$325 million.

Zacks Rank & Stocks to Consider

Genuine Parts currently carries a Zacks Rank of 4 (Sell).

Some better-ranked stocks in the Auto-Tires-Trucks sector include BRP Inc. (DOOO - Free Report) , Fox Factory Holding Corp. FOXF and SPX Corp. SPXC, each carrying a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

BRP has a projected earnings growth rate of 20.17% for 2020. Its shares have surged 98.9% over the past year.

Fox Factory has an estimated earnings growth rate of 9.67% for the ongoing year. The company’s shares have appreciated 19.4% in a year’s time.

SPX has an expected earnings growth rate of 6.52% for the current year. The stock has rallied 39.8% in the past year.

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