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Genuine Parts (GPC) Q2 Earnings and Revenues Miss Estimates

Zacks Equity Research

Genuine Parts Company GPC has reported adjusted earnings of $1.57 per share in second-quarter 2019, whereas it recorded $1.59 in the prior-year quarter. Its earnings missed the Zacks Consensus Estimate of $1.67 in the reported quarter.

The company recorded net income of $224.4 million in second-quarter 2019, down from $227 million in the prior-year quarter.

Genuine Parts reported net sales of $4.93 billion, up 2.3% year over year. The figure missed the Zacks Consensus Estimate of $5 billion. Net sales included 1.6% comparable growth, roughly 2.7% from acquisitions, partly offset by 1.5% adverse impact of foreign currency translation and 0.5% attributable to the sale of Grupo Auto Todo in first-quarter 2019.

Operating profit decreased to $385.6 million from $390.2 million in second-quarter 2018. Selling, administrative and other expenses rose to $1.22 billion from $1.15 billion a year ago.

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 improved to $2.77 billion from the year-ago figure of $2.74 billion. However, the segment’s operating profit declined to $228.4 million in the reported quarter from $243.6 million a year ago.

The Industrial Parts segment’s net sales rose to $1.68 billion from $1.6 billion in the year-ago quarter. Moreover, operating profit increased to $136.3 million from $125.2 million in the year-ago quarter.

The Business Products segment’s net sales fell to $477.7 million from $483.2 million recorded in the prior-year quarter. Operating profit for the segment declined to $20.9 million from $21.4 million recorded in the prior-year quarter.

Financial Position

Genuine Parts had cash and cash equivalents of $562.6 million as of Jun 30, 2019, up from $355.1 million as of Jun 30, 2018. As of Jun 30, 2019, long-term debt increased to $2.9 billion from $2.5 billion as of Jun 30, 2018.

Guidance

In 2019, Genuine Parts expects sales to rise 4.5-5.5%. The company expects adjusted earnings per share to be $5.65 to $5.75 down from $5.81-$5.96 in the prior quarter.

Zacks Rank & Stocks to Consider

Genuine Parts currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the auto space are Copart, Inc CPRT, CarMax, Inc KMX and AutoZone, Inc AZO, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Copart has an expected long-term growth rate of 20%. In the past six months, shares of the company have shot up 53.9%.

CarMax has an expected long-term growth rate of 12.6%. In the past six months, shares of the company have rallied 37.5%.

AutoZone has an expected long-term growth rate of 12.2%. In the past six months, shares of the company have improved 37.4%.

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