Genuine Parts Company
) earnings per share inched up 1% year over year to $1.12 in the
third quarter of 2013 from $1.11 reported in the year-ago
quarter. However, the reported earnings missed the Zacks
Consensus Estimate by 8 cents.
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Net income increased marginally by 0.5% year over year to $173.7
million from $172.9 million in the third quarter of 2012. This
quarter was very challenging for Genuine Parts owing to the poor
performance of the non-automotive businesses, which was partially
offset by the better opportunities from the Automotive Group.
Revenues in the quarter grew 9.2% to $3.68 billion, missing the
Zacks Consensus Estimate of $3.74 billion. The year-over-year
improvement in revenues was due to hike in revenues from
Automotive Parts segment, partially offset by decline in demand
in non-automotive businesses.
Operating profit increased 4.1% to $300.5 million from $288.8
million in the third quarter of 2012. Selling, general and
administrative expenses rose to $794 million from $678.9 million
a year ago.
Revenues in the Automotive Parts segment grew 22.1% to $2.02
billion, thanks to the core North American growth of nearly 5%
and the positive impact from the Australasian acquisition. Higher
sales from North America and GPC Asia Pacific also had favorable
impacts on the results. The segment's operating profit rose 19.6%
to $180.2 million in the quarter.
GPC's other businesses continued to face weak market conditions
during the quarter. Revenues in the Motion Industries or
Industrial segment slipped 2.5% to $1.11 billion, S. P. Richards
or Office Products segment fell 3.1% to $430.5 million and
Electrical segment or EIS segment decreased 5.3% to $142.8
Operating profits in the Motion Industries or Industrial segment
dipped 15.9% to $79.6 million, S. P. Richards or Office Products
segment fell 6.2% to $28.1 million and Electrical segment or EIS
segment decreased 6.9% to $12.6 million in the quarter
Genuine Parts had cash and cash equivalents of $320.9 million as
of Sep 30, 2013, down from $398.1 million as of Sep 30, 2012.
Long-term debt increased to $833.9 million as of Sep 30, 2013,
from $500.0 million as of Sep 30, 2012. Consequently,
debt-to-capitalization ratio rose to 20.9% as of Sep 30, 2013
from 14.2% as of Sep 30, 2012.
During the first nine months of 2013, Genuine Parts' net cash
flow from operations improved 9.5% to $837.5 million from $764.8
million in the same period last year. Capital expenditures
increased to $84.1 million from $71.6 million in the first nine
months of 2012.
Genuine Parts has undertaken various initiatives to boost sales
and earnings. It has adopted cost-saving activities together with
operating margin improvement strategies. Strong balance sheet and
cash flow will also support the company's future expansion
strategies. However, poor sales in the company's Industrial,
Electrical and Office Products segments are the long-term
Genuine Parts Company is a prominent player in the automotive
replacement parts industry along with
Standard Motor Products Inc.
Motorcar Parts of America Inc.
). Currently, shares of Genuine Parts retain a Zacks Rank #4