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Genuine Parts (GPC) Beats on Q3 Earnings, Revenues Lag

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Genuine Parts CompanyGPC reported earnings of $1.24 per share in third-quarter 2015 that were in line with the year-ago figure and surpassed the Zacks Consensus Estimate of $1.23. Earnings benefited from solid automotive distribution business results and better sales in the Office and Electrical distribution businesses, partially offset by foreign currency headwinds and challenging global economic conditions.

Genuine Parts Company - Earnings Surprise | FindTheBest

Genuine Parts recorded net income of $188 million in the third quarter of 2015, down from $190.5 million in the prior-year quarter.

Revenues in the reported quarter dropped 2% year over year to $3.92 billion, missing the Zacks Consensus Estimate of $4 billion.

Operating profit increased 2.6% to $348.5 million from $339.6 million in the third quarter of 2014. On the other hand, selling, general and administrative expenses decreased to $834.4 million from $850.2 million a year ago.

Revenues at the Automotive Parts segment fell 2% to $2.06 billion from the year-ago level of $2.1 billion. Revenues gained from core automotive growth, offset by currency translation headwinds. The segment's operating profit increased to $202 million in the reported quarter from $193.3 million a year ago.

Revenues at the Motion Industries or Industrial segment went down 4% to $1.17 billion owing to declining performance and currency headwinds, partially offset by synergies from acquisitions. The S. P. Richards or Office Products segment's revenues rose 3% to $510.8 million on the back of general improvement in performance. The Electrical (EIS) segment's revenues improved 2% to $196.8 million on the back of benefits from acquisitions, offset by a decrease in core sales and the negative impact of copper pricing.

Operating profits at the Motion Industries or Industrial segment declined 5.4% to $90.1 million. Meanwhile, operating profits at the S. P. Richards or Office Products segment increased 9.3% to $36.4 million from $33.3 million a year ago. At the Electrical or EIS segment, operating profits went up 12.5% to $20 million from $17.8 million in the year-ago quarter.

Financial Position

Genuine Parts had cash and cash equivalents of $199.3 million as of Sep 30, 2015, up from $135.5 million as of Sep 30, 2014. Long-term debt reduced to $625 million as of Sep 30, 2015, from $835.4 million as of Sep 30, 2014.

During the first nine months of 2015, Genuine Parts' net cash flow from operations increased to $896 million from $589.3 million in the same period last year. Capital expenditures contracted to $62 million from $73.8 million in the same period a year ago.

Outlook

Genuine Parts expects to face challenges in the Industrial and Electrical businesses in the fourth quarter of 2015. This will adversely affect the company's overall earnings and revenues.

Zacks Rank

Notably, Genuine Parts is a prominent player in the automotive replacement parts industry. The company currently carries a Zacks Rank #4 (Sell).

Better-ranked automobile stocks include Penske Automotive Group, Inc. PAG , O'Reilly Automotive Inc. ORLY and Superior Industries International, Inc. SUP , all carrying a Zacks Rank #2 (Buy).

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GENUINE PARTS (GPC): Free Stock Analysis Report

PENSKE AUTO GRP (PAG): Free Stock Analysis Report

O REILLY AUTO (ORLY): Free Stock Analysis Report

SUPERIOR INDS (SUP): 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 Nasdaq, Inc.


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

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