Genuine Parts Misses by a Penny - Analyst Blog

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Genuine Parts Company ( GPC ) reported a 14.4% rise in earnings per share to $1.11 in the third quarter of the year from 97 cents in the same quarter of 2011. However, it lagged the Zacks Consensus Estimate by a penny. Total profit grew 13.9% to $172.9 million from $151.8 million a year ago.

Revenues in the quarter inched up 2.7% (4.0% based on comparable store sales) to $3.4 billion, missing the Zacks Consensus Estimate of $3.5 billion. Operating profit also grew 0.4% or $3.1 million to $704.5 million from $701.4 million a year ago, driven by a 0.2% or $1.1 million fall in selling, general and administrative expenses to $678.9 million during the quarter.

Revenues in the Automotive Group rose 2.5% (4.0% based on comparable store sales) to $1.7 billion, while operating profits went up 6.7% to $150.6 million. Revenues in the Industrial Group or Motion Industries escalated 4.5% (6.0% based on comparable store sales) to $1.1 billion. However, operating profits in the segment dipped 2.6% to $94.6 million.

Revenues in the Electrical Group or EIS increased 5.3% (7.0% based on comparable store sales) to $150.9 million during the quarter while operating profits grew impressively by 21.7% to $13.6 million.

The company's Office Products Group or S. P. Richards continues to face challenging conditions. Revenues in the segment slipped 0.7% (1.0% based on comparable store sales) to $444.3 million. However, operating profits rose 10.1% to $29.9 million during the quarter.

Genuine Parts had cash and cash equivalents of $398.1 million as of September 30, 2012, down from $534.8 million as of September 30, 2011. Long-term debt remained unchanged at $500 million as of September 30, 2012 compared with the same as of September 30, 2011.

During the first nine months of 2012, Genuine Parts' net cash flow from operations improved significantly by 53.8% to $764.8 million from $497.4 million in the prior-year quarter, due to higher profits and favorable changes in operating assets and liabilities. Meanwhile, capital expenditures increased to $71.6 million from $63.9 million in the corresponding period of 2011.

Genuine Parts has undertaken various initiatives to boost sales and earnings, such as product line expansion, penetration into new markets and cost-saving activities. The company relies on a diverse product portfolio for top-line and bottom-line growth.

Its major competitors include Advance Auto Parts Inc. ( AAP ), AutoZone Inc. ( AZO ) and Standard Motor Products Inc. ( SMP ). Currently, the company retains a Zacks #4 Rank on its stock, which translates to a Sell rating for the short term (1-3 months).



ADVANCE AUTO PT (AAP): Free Stock Analysis Report

GENUINE PARTS (GPC): Free Stock Analysis Report

STANDARD MOTOR (SMP): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: AAP , GPC , SMP

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