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Genuine Parts (GPC) Q3 Earnings Lag Estimates, Revenues Beat

Genuine Parts CompanyGPC reported earnings of $1.08 per share in the third quarter of 2017 compared with $1.24 recorded in the year-ago quarter. Adjusted earnings came in at $1.16 per share, which missed the Zacks Consensus Estimate of $1.28.

The company recorded net income of $158.4 million in the third quarter of 2017, down from $185.3 million in the prior-year quarter.

Genuine Parts reported revenues of $4.09 billion, up 3.9% year over year. The Zacks Consensus Estimate for revenues was $4.08 billion. Operating profit decreased to $310.3 million from $328 million in the third quarter of 2016. Selling, general and administrative expenses rose to $940.3 million from $869.6 million a year ago.

Genuine Parts Company Price, Consensus and EPS Surprise

Genuine Parts Company Price, Consensus and EPS Surprise | Genuine Parts Company Quote

Segment Results

Revenues from the Automotive Parts segment improved 3.6% to $2.2 billion from the year-ago level of $2.1 billion. The segment's operating profit however decreased to $178.2 million in the reported quarter from $197.9 million a year ago.

Revenues at the Motion Industries or Industrial segment increased 7.1% to $1.24 billion. Operating profit at the segment was $94.6 million, up from $85.6 million in the year-ago quarter.

The Electrical or EIS segment's revenues rose 11.6% year over year to $199.2 million. Operating profit, however, decreased to $13.5 million from $14.3 million in the year-ago quarter.

The S. P. Richards or Office Products segment's revenues declined 4.7% to $510 million. Operating profit at the segment declined to $24 million from $30.3 million recorded in the prior-year quarter.

Financial Position

Genuine Parts had cash and cash equivalents of $210.1 million as of Sep 30, 2017, down from $225.2 million as of Sep 30, 2016. Long-term debt increased to $550 million as of Sep 30, 2017 from $300 million as of Sep 30, 2016.

In third-quarter 2017, capital expenditure increased to $43.1 million from $36.9 million, in the year-ago period.

Guidance

For 2017, Genuine Parts raised its revenue growth rate from the range of 3%-4% to 4%-4.5%. Adjusted earnings per share in 2017 are expected to be in the range of $4.55-$4.60.

Genuine Parts currently has a Zacks Rank #3 (Hold)

Better-ranked stocks in the auto space include Ferrari N.V. RACE , Cummins Inc. CMI and Continental AG CTTAY . While Ferrari sports a Zacks Rank #1 (Strong Buy), Cummins and Continental AG carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Ferrari has an expected long-term growth rate of 14.1%.

Cummins has an expected growth rate of around 12% in the long term.

Continental has an expected long-term growth rate of 7.1%.

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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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