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Genuine Parts Q4 profit soars 73%, beats estimates

Genuine Parts Company’s (GPC) earnings soared 73% helped by higher sales for the fourth quarter of 2018. The automotive replacement parts distributor benefited from higher revenues from each of its business segments and its accretive acquisitions. The results exceeded analysts’ expectations. The company guided full-year 2019 earnings and revenue in line with consensus estimates.

Net income soared 72.6% to $186.7 million and earnings surged 74% to $1.27 per share. Before the impact of certain transaction and other costs incurred primarily related to the company’s acquisition of Alliance Automotive Group, adjusted earnings grew 13.4% to $1.35 per share.

Sales for the fourth quarter increased 9.4% to $4.6 billion. The quarterly sales included 4.6% comparable growth, about 6% from acquisitions and about 1.2% negative impact from foreign currency translation.

Genuine Parts fourth quarter 2018 earnings snapshot
Genuine Parts Q4 2018 Earnings Infographic

Automotive Group sales grew by 11.4% year-over-year. This included about 4% comparable sales increase, about 9% benefit from acquisitions and an unfavorable foreign currency translation of about 2%.

Sales for the Industrial Group were up 8.7%, including an approximate 7% comparable sales increase and 2% from acquisitions. Sales for the Business Products Group were up 1.6% consisting primarily of comparable sales growth.

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Looking ahead into the full year 2019, the company expects sales growth in the range of 3% to 4% and adjusted sales growth of 4% to 5%, before an expected headwind from currency translation of 1%. Earnings are anticipated to be in the range of $5.75 to $5.90 per share and adjusted earnings are predicted to be $5.81 to $5.96 per share before the impact of the 1% currency headwind. The tax rate is now projected to be about 25% in 2019.

“We also completed our first full year of operations in Europe and successfully combined EIS into Motion Industries to form a larger and stronger industrial business. With these and other accomplishments, and our plans in place for the new year, we are well-positioned to further strengthen our global platform in 2019, driving long-term sustainable growth and significant value for our shareholders,” Chief Executive Paul Donahue said.

Shares of Genuine Parts ended Friday’s regular session up 1.80% at $107.59 on the NYSE. The stock has risen over 7% in the past year and over 5% in the past three months. On Friday, the stock has reached a new 52-week high of $107.60, which is its all-time third highest.

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