Genuine Parts Company
) earnings per share increased 4.3% year over year to 97 cents in
the fourth quarter of 2013 from 93 cents reported in the year-ago
quarter (including one-time pension gain of 10 cents per share).
The earnings surpassed the Zacks Consensus Estimate of 92 cents.
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Revenues in the quarter grew 12.8% to $3.5 billion, in line with
the Zacks Consensus Estimate. The year-over-year improvement in
revenues can be attributed to the benefits from acquisitions,
partially offset by currency headwind.
Operating profit increased 8.6% to $271 million from $249.4
million in the fourth quarter of 2012. Selling, general and
administrative expenses rose 29.5% to $820.6 million from $633.7
million a year ago.
Revenues in the Automotive Parts segment grew 25.1% to $1.9
billion. The segment's operating profit rose 25.6% to $153.9
million in the quarter from $122.5 year ago.
Revenues in the Motion Industries or Industrial segment went up
2.9% to $1.09 billion, S. P. Richards or Office Products segment
revenues fell 4.3% to $385.8 million and Electrical segment or
EIS segment revenues rose 6.3% to $143.9 million.
Operating profits in the Motion Industries or Industrial segment
dipped 6.1% to $73.3 million. Operating profits in the S. P.
Richards or Office Products segment fell 13.6% to $31.4 million
and in the Electrical segment or EIS segment decreased 1.4% to
$12.3 million in the quarter.
Fiscal 2013 Performance
Genuine Parts' adjusted earnings increased 3.5% to $4.19 per
share for full-year 2013 from $4.05 in 2012, exceeding the Zacks
Consensus Estimate of $4.14. Revenues for full-year 2013 rose
8.2% to $14.1 billion from $13 billion in 2012, beating the Zacks
Consensus Estimate of $14 billion. The rise reflects an 18.5%
increase in automotive sales partially offset by a combined 1%
sales decrease in non-automotive businesses.
Genuine Parts had cash and cash equivalents of $196.9 million as
of Dec 31, 2013, down from $403.1 million as of Dec 31, 2012.
Long-term debt increased to $764.7 million as of Dec 31, 2013,
from $500.0 million as of Dec 31, 2012.
During 2013, Genuine Parts' net cash flow from operations
improved to $1.1 billion from $906.4 million in the same period
last year. Capital expenditures increased to $124.1 million from
$102 million in 2012.
The board of directors of Genuine Parts declared a 7% hike in
annual cash dividend in 2014 to $2.30 cents per share from $2.15.
The quarterly dividend of 57.5 cents will be paid on Apr 1, 2014
to stockholders of record as of Mar 7, 2014.
Genuine Parts has undertaken various initiatives to boost sales
and earnings. It is poised to benefit from the recent strategic
acquisition together with operating margin improvement plans.
Strong balance sheet and cash flow will also support the
company's future expansion strategies. However, weak profits in
the company's Industrial, Electrical and Office Products segments
are the long-term headwinds.
Genuine Parts Company is a prominent player in the automotive
replacement parts industry with a Zacks Rank #3 (Hold). Some
better-ranked stocks worth considering in the automotive
replacement industry are
Remy International, Inc.
Motorcar Parts of America Inc.
). Remy and Motorcar Parts sport a Zacks Rank #1 (Strong Buy)
while LKQ carries a Zacks Rank #2 (Buy).