Genuine Parts Q2 Profit Down 1%, Results Miss Estimates

(RTTNews) - Automotive aftermarket distributor Genuine Parts Co. (GPC) on Monday reported a 1 percent decline in profit for the second quarter from last year amid lower sales at its industrial group segment. Both revenue and earnings per share for the quarter missed analysts' expectations.

Chairman and CEO Tom Gallagher said, "Our results reflect the moderation in our sales and earnings growth rates in the second quarter, primarily due to the ongoing choppiness in the economy. This is especially the case for our Industrial business."

The Atlanta, Georgia-based company's net income for the second quarter was $195.37 million, down from $197.73 million in the prior-year quarter. However, earnings per share were flat with last year at $1.28 per share.

On average, eleven analysts polled by Thomson Reuters expected the company to report earnings of $1.33 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter edged up 1 percent to $3.94 billion from $3.91 billion in the same quarter last year, but missed analysts' consensus revenue estimate of $4.05 billion.

Genuine Parts noted that sales growth for the quarter included a 1.3 percent contribution from acquisitions and 2.2 percent underlying sales growth, partially offset by an expected currency headwind of 2.7 percent.

Operating expenses for the quarter edged down to $868.21 million from $868.99 million last year.

The company's automotive group sales were almost flat with last year at $2.10 billion, while sales for industrial group or motion industries, decreased 2 percent to $1.19 billion.

Meanwhile, sales for office products group or S.P. Richards, grew 14 percent from to $477.76 million, and electrical/electronic materials group sales improved 4 percent to $194.70 million.

Gallagher said, "In the midst of the challenging sales environment, two important highlights thus far in 2015 include the further strengthening of our balance sheet and improved cash flows, which position us well for future growth."

GPC closed Friday's trading at $90.64. In Monday's pre-market activity, the stock is down $0.34 or 0.38 percent to $90.30.