Genuine Parts Beats, EPS Up 20% - Analyst Blog
Genuine Parts Company
) revealed a 19.8% rise in EPS to $1.03 in the fourth quarter of
2012 from 86 cents in the corresponding quarter of 2011, beating
the Zacks Consensus Estimate by 10 cents. Net income increased
18.7% to $160.2 million from $135.0 million in 2011.
Revenues went up 3.5% to $3.1 billion, which compared with the Zacks Consensus Estimate of $3.2 billion. The revenue increase was driven by respectable sales growth in three of the company's four businesses.
Revenues in the Automotive segment rose 4.9% to $1.5 billion, Motion Industries or Industrial segment inched up 2.1% to $1.1 billion, and S.P. Richards or Office Products Group grew 2.9% to $402.9 million. However, EIS or Electrical segment revenues inched down 1.6% to $135.4 million
For full year 2012, Genuine Parts reported a 15.6% increase in profits to $4.14 per share from $3.58 in 2011, exceeding the Zacks Consensus Estimate of $4.05. Net income escalated 14.7% to $648.0 million from $565.1 million in 2011. Revenues increased 4.5% to $13.0 billion, nearly meeting the Zacks Consensus Estimate of $13.1 billion.
Revenues in the Automotive segment scaled up 4.3% to $6.3 billion, reflecting solid fundamentals in the automotive aftermarket, including the overall aging of the vehicle population. Revenues in the Industrial segment rose 6.7% to $4.5 billion driven by the company's internal growth initiatives and strength in the manufacturing sector.
Revenues in the Office Products Group were flat at $1.7 billion during the year. Revenues in the Electrical segment improved 4.5% to $582.8 million.
Genuine Parts also announced an increase in its annual dividend payment, making 2013 the 57th consecutive year of increased dividends paid to shareholders. The company's Board of Directors announced an 8.6% increase in cash dividend to an annual rate of $2.15 per share compared with the previous dividend of $1.98 per share. The increased quarterly cash dividend of $0.5375 per share is payable on Apr 1, 2013 to shareholders of record Mar 8, 2013.
Genuine Parts had cash and cash equivalents of $403.1 million as of Dec 31, 2012, down from $525.1 million as of Dec 31, 2011. Long-term debt remained unchanged at $500 million as of Dec 31, 2012 compared with the corresponding period a year ago.
In 2012, Genuine Parts' net cash flow from operations improved 45.0% to $906.4 million from $624.9 million in the prior-year, due to higher profits and favorable changes in operating assets and liabilities. Capital expenditures decreased marginally to $102.0 million from $103.5 million in 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. Currently, the company retains a Zacks Rank #3 on its stock, which translates to a Hold rating for the short term (1-3 months).
Few stocks that are performing well in the industry where Genuine Parts operates include Oshkosh Corporation ( OSK ) and Commercial Vehicle Group Inc. ( CVGI ), and Strattec Security ( STRT ). They carry a Zacks Rank #1 (Strong Buy).
COMML VEHICLE (CVGI): Free Stock Analysis Report
GENUINE PARTS (GPC): Free Stock Analysis Report
OSHKOSH CORP (OSK): Free Stock Analysis Report
STRATTEC SEC CP (STRT): Free Stock Analysis Report
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