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Genuine Parts (GPC) Q4 Earnings, Revenues Beat Estimates

Genuine Parts CompanyGPC reported earnings of $1.02 per share in fourth-quarter 2016, lower than $1.07 recorded in the year-ago quarter. Also, earnings per share surpassed the Zacks Consensus Estimate of $1.01.

The company recorded net income of $152.5 million in the fourth quarter of 2016, down from $161.3 million in the prior-year quarter.

Revenues in the reported quarter rose 3% year over year to $3.78 billion and surpassed the Zacks Consensus Estimate of $3.77 billion. The rise was due to the benefit from acquisitions in each of the business segments and also improvement in comparable sales trends in the Automotive, Industrial and Electrical/Electronic businesses.

While, operating profit decreased to $276.3 million from $291.1 million in the fourth quarter of 2015, selling, general and administrative expenses rose to $855.6 million from $797.9 million a year ago.

Genuine Parts Company Price, Consensus and EPS Surprise

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

2016 Performance

Genuine Parts' earnings decreased to $4.59 per share for full-year 2016 from $4.63 in 2015, surpassing the Zacks Consensus Estimate of $4.58. Revenues for full-year 2016 increased 0.4% to $15.34 billion from $15.28 billion in 2015 and surpassed the Zacks Consensus Estimate of $15.31 billion.

Segment Results

Revenues at the Automotive Parts segment improved 2% to $2 billion from the year-ago level of $1.95 billion. The segment's operating profit decreased to $160 million in the reported quarter from $169.1 million a year ago.

Revenues at the Motion Industries or Industrial segment increased 4% to $1.15 billion. Operating profit at the segment was $80.9 million, up from $72.4 million in the year-ago quarter.

The Electrical or EIS segment's revenues were flat year over year at $177 million. Operating profit decreased to $15.4 million from $16.1 million in the year-ago quarter.

The S. P. Richards or Office Products segment's revenues improved 4% to $476 million. Operating profit at the segment declined to $19.9 million from $33.4 million a year ago.

Financial Position

Genuine Parts had cash and cash equivalents of $242.9 million as of Dec 31, 2016, up from $211.6 million as of Dec 31, 2015. Also, long-term debt increased to $875 million as of Dec 31, 2016, from $625 million as of Dec 31, 2015.

In 2016, Genuine Parts' net cash flow from operations decreased to $946.1 million from $1.2 billion in the prior-year period. Capital expenditures increased to $160.6 million from $109.5 million a year ago.

Guidance

For 2017, annual revenues of Genuine Parts is expected to increase in the range of 3% to 4%. Earnings per share in 2017 are expected to be in the band of $4.70-$4.80.

Dividend

The board of directors of Genuine Parts increased dividend to $2.70 per share from $2.63, paid earlier. On Apr 3, 2017, the company is expected to pay the quarterly dividend of 67.5 cents to shareholders as of Mar 10, 2017. With this, Genuine Parts has increased dividend for 61 consecutive years.

Price Performance

Genuine Parts has outperformed the Zacks categorized Auto/Truck Replacement Parts industry over the last three months. During this period, the company's share price increased 1.3%, while the industry gained 0.5%. The rally in the stock price was driven by various initiatives undertaken by the company to boost sales and earnings, such as product line expansion, penetration into new markets and cost-saving activities.

Zacks Rank & Key Picks

Genuine Parts Motors currently carries a Zacks Rank #3 (Hold).

Better-ranked companies in the auto space include Honda Motor Co., Ltd. HMC , Fox Factory Holding Corp. FOXF and General Motors Company GM . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

For the current year Honda, Fox Factory and General Motors expect earnings growth rates of around 27%, 16.6% and 9.4%, respectively.

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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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