Genuine Parts Q2 Profit Rises, Tops View

(RTTNews) - Automotive replacement parts distributor Genuine Parts Co. (GPC) reported Thursday a profit for the second quarter that grew 28 percent from last year, reflecting sales growth amid improved results at its automotive business.

Earnings per share topped analysts' expectations, while quarterly revenues matched their estimates. Looking ahead, the company said it remains committed to its core objectives of growing sales and earnings, as well as continuing its operating margin improvement.

"We are pleased to report record levels of sales and earnings for the second quarter. The progress in our operations was driven by the improved results in our automotive business," Chairman and CEO Tom Gallagher said in a statement.

The Atlanta, Georgia-based company reported net income of $216.36 million or $1.39 per share for the second quarter, higher than $168.62 million or $1.08 per share in the prior-year quarter.

On average, nine analysts polled by Thomson Reuters expected the company to earn $1.21 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter edged up 10 percent to $3.68 billion from $3.34 billion in the same quarter last year, and matched eight Wall Street analysts' consensus estimate of $3.68 billion.

The company's automotive group sales were up 22 percent to $2.01 billion, while sales for motion industries, the industrial group, declined 2 percent to $1.13 billion from a year ago.

Automotive group sales were boosted by core North American growth of about 6 percent and the positive impact of the Australasian acquisition.

Genuine Parts acquired the remaining 70 percent stake in Australian peer Exego Group in a $800 million deal, including assumption of about $160 million in net debt, in April 1, 2013. Exego is a leading aftermarket distributor in Australasia and is now a wholly-owned subsidiary of Genuine Parts.

The company had previously purchased a 30 percent stake in the Exego Group on January 1, 2012. The re-measurement of this investment favorably impacted earnings per share for the quarter by $0.22.

Sales for S.P. Richards, office products group, decreased 3 percent to $402 million from last year, and electrical/electronic materials group sales totaled $143 million, down 4 percent from the prior-year quarter.

Operating expenses for the quarter grew to $790 million from $705 million in the year-ago quarter.

"As always, we remain committed to our core objectives of growing sales and earnings, showing continued operating margin improvement, generating solid cash flows and maintaining a strong balance sheet," Gallagher added.

In Thursday's regular trading session, GPC is currently trading at $82.88, down $1.25 or 1.49% on a volume of 67,269 shares.