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Genuine Parts (GPC) Q2 Earnings & Revenues Miss Estimates - Tale of the Tape

Genuine Parts Company ( GPC ), based in Atlanta, GA, distributes automotive and industrial replacement parts, office products and electrical/electronic materials in the U.S., Canada and Mexico. The company is poised to benefit from its 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- and bottom-line growth. Further, Genuine Parts will benefit from the frequently undertaken acquisitions to expand its business.

However, rising competition is highly challenging for the company. Moreover, unfavorable economic conditions, including low economic growth and high unemployment have adversely affected the credit markets, consumer and business confidence, and commodity prices, creating challenges for Genuine Parts.

Estimate Trend & Surprise History

Investors should note that the second-quarter earnings estimate for Genuine Parts has been stationary over the past week and month. The Zacks Consensus Estimate has remained static at $1.32 over these periods.

The company has delivered mixed earnings surprises. It has beaten the Zacks Consensus Estimate in two of the trailing 4 quarters with an average beat of around 0.80%. Thus investors are eagerly awaiting Genuine Parts latest earnings report.

We have highlighted some of the key stats from this just-revealed announcement below:

Earnings

Genuine Parts' earnings was $1.28 per share in the second quarter of 2015 which was in line with the year ago level but missed the Zacks Consensus Estimate of $1.32. Improvement in revenues and earnings was supported by solid cash flows and a strong balance sheet.

Revenues

Genuine Parts reported revenues of $3.94 billion, up 1% year over year. However, revenues missed the Zacks Consensus Estimate of $4.04 billion. The year-over-year improvement can be attributed to benefits from acquisitions and increased sales, partially offset by currency headwinds.

Key Stats/Developments to Note

Genuine Parts' Australia-based wholly-owned automotive distribution company - GPC Asia Pacific - will acquire Covs Parts Pty Ltd from Automotive Holdings Group (AHG). The company expects that this acquisition will generate annual revenues of around $90 million. This acquisition will help the company to expand its business in Western Australia.

Zacks Rank

Currently, Genuine Parts has a Zacks Rank #2 (Buy), but that could change following its earnings report which has just released.

Market Reaction

Genuine Parts' shares decreased 2.16% to $88.68 following the release. It would be interesting to see how the market reacts to the results during the trading session today.

Check back later for our full write up on Genuine Parts' earnings 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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