Genuine Parts Beats Q3 Earnings, Revenues on Solid Sales
Genuine Parts Company (GPC) reported earnings of $1.24 per share in third-quarter 2014, surpassing the Zacks Consensus Estimate by penny. Earnings were up 10.7% from adjusted earnings of $1.12 in the comparable quarter of the previous year. Earnings per share in third-quarter of 2013 had been adjusted to exclude the impact of pre-tax expenses.
Genuine Parts Company - Earnings Surprise | FindTheBest
Genuine Parts recorded net income of $190.5 million in the third quarter of 2014 compared with $173.7 million in the year-ago quarter.
Revenues in the quarter rose 8.2% year over year to $3.99 billion, marginally beating the Zacks Consensus Estimate of $3.96 billion. The year-over-year improvement can be attributed to benefits from acquisitions and increased sales, partially offset by currency headwinds. Revenues also benefited from improved performance by all the reporting segments.
Operating profit increased 13% to $339.6 million from $300.5 million in the third quarter of 2013. On the other hand, selling, general and administrative expenses rose 7.1% to $850.2 million from $793.9 million a year ago.
Revenues in the Automotive Parts segment grew 4.1% to $2.1 billion. The upside was driven by core automotive growth. The segment’s operating profit augmented 7.3% to $193.3 million in the quarter from $180.2 million a year ago.
Revenues in the Motion Industries or Industrial segment went up 9.9% to $1.2 billion on benefits from acquisitions and better performance, partially offset by currency headwinds. S. P. Richards or Office Products segment revenues rose 15.4% to $496.6 million on the back of synergies from acquisitions and an overall improvement in performance. Electrical segment or EIS segment revenues surged 35.4% to $193.3 million on the back of synergies from acquisitions.
Operating profits at the Motion Industries or Industrial segment soared 19.7% to $95.3 million. Meanwhile, operating profits at the S. P. Richards or Office Products segment increased 18.6% to $33.3 million from $28.1 million a year ago. In the Electrical segment or EIS segment, operating profit grew 40.7% to $17.8 million in the quarter under review.
Financial Position
Genuine Parts had cash and cash equivalents of $135.5 million as of Sep 30, 2014, substantially down from $320.9 million as of Sep 30, 2013. Long-term debt decreased to $835.4 million as of Sep 30, 2014, from $833.9 million as of Sep 30, 2013.
During the first nine months of 2014, Genuine Parts’ net cash flow from operations dropped to $589.3 million from $837.5 million in the same period last year. Capital expenditures contracted to $73.8 million from $84.1 million in the same period of 2013.
Our Take
Genuine Parts has been undertaking 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. Genuine Parts is also actively undertaking acquisitions to expand business.
Notably, Genuine Parts Company is a prominent player in the automotive replacement parts industry, and currently carries a Zacks Rank #2 (Buy).
Some other well-performing stocks worth considering in the same industry are Commercial Vehicle Group Inc. (CVGI), Douglas Dynamics, Inc. (PLOW) and Tesla Motors, Inc. (TSLA), all of which carry the same Zacks Rank as Genuine Parts.
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