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Will Genuine Parts' (GPC) Q4 Earnings Disappoint Investors?

Genuine Parts CompanyGPC is set to report fourth-quarter and full-year 2015 results on Feb 16. In the last quarter, the company posted a positive earnings surprise of 0.81%. Let us see how things are shaping up for this announcement.

Factors Influencing this Quarter

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- and bottom-line growth. Moreover, the recent acquisitions should drive sales in the quarter to be reported. Further, the Office Products segment is poised to benefit from the successful completion of a year of the acquisition of Impact Products and increased volume from Office Depot.

However, Genuine Parts is facing the negative impact of currency fluctuations. Also, the Electrical segment is under pressure owing to the challenges posed by a strengthening U.S. dollar to a number of its original equipment manufacturer customers.

Earnings Whispers

Our proven model does not conclusively show that Genuine Parts is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at -2.02%. This is because the Most Accurate estimate stands at 97 cents, while the Zacks Consensus Estimate is pegged at 99 cents.

Zacks Rank: Genuine Parts' Zacks Rank #3 (Hold) increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Superior Industries International Inc. SUP has an Earnings ESP of +11.11% and a Zacks Rank #1 (Strong Buy). The company is expected to release fourth-quarter 2015 earnings on Mar 7.

Cooper Tire & Rubber Co. CTB has an Earnings ESP of +10.96% and a Zacks Rank #1. The company will report fourth-quarter 2015 earnings on Feb 23.

Magna International Inc. MGA has an Earnings ESP of +0.89% and a Zacks Rank #3. The company will report fourth-quarter 2015 earnings on Feb 26.

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

SUPERIOR INDS (SUP): Free Stock Analysis Report

MAGNA INTL CL A (MGA): Free Stock Analysis Report

GENUINE PARTS (GPC): Free Stock Analysis Report

COOPER TIRE (CTB): 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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