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Genuine Parts (GPC) Q4 Earnings & Sales Beat, Increase Y/Y
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Genuine Parts (GPC - Free Report) reported fourth-quarter 2022 adjusted earnings of $2.05 per share, up 14.5% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $1.90 per share. Higher-than-expected sales and operating profits across both of its segments resulted in this outperformance.
The company reported net sales of $5,524 million, outpacing the Zacks Consensus Estimate of $5,349 million. The top line rose 15% year over year. The upside resulted from growth in comparable sales across both the segments and benefit from acquisitions, partly offset by a net unfavorable impact of foreign currency translation, to the tune of 4.1%.
Genuine Parts Company Price, Consensus and EPS Surprise
The Automotive segment’s net sales totaled $3,433 million in the reported quarter, surpassing the Zacks Consensus Estimate of $3,281 million. The top line was also up 7.6% year over year on the back of comparable sales growth and acquisition benefits. The segment’s comparable sales rose 8.2% year over year. Operating profit increased 11% to $295 million, topping the consensus mark of $281 million. Segment profit margin came in at 8.6%, up 30 basis points from the year-ago period.
The Industrial Parts segment’s net sales totaled $2,091 million, surpassing the consensus estimate of $1,997 million. The top line also rose 29.6% year over year on comparable sales growth and acquisition benefits. The sales growth reflects a 14.3% contribution from the buyout of Kaman Distribution Group. The segment’s comparable sales climbed 16.7% in the reported quarter. Operating profit rose 49.8% from the prior-year quarter to $230 million, which beat the consensus mark of $201 million. The profit margin of 11% expanded by 150 basis points in the fourth quarter of 2021.
Financial Performance
Genuine Parts had cash and cash equivalents worth $653.5 million as of Dec 31, 2022, declining from $714.7 million as of Dec 31, 2021. The company exited the fourth quarter with $2.2 billion in total liquidity, comprising $1.5 billion on the revolving credit facility and the remainder as cash/cash equivalents. Long-term debt increased to $3,076.7 million from $2,409.3 million as of Dec 31, 2021. The company generated free cash flow of $1.1 billion for the twelve months ended Dec 31, 2022.
2023 Guidance
Genuine Parts projects revenues from automotive and industrial sales to witness a year-over-year uptick of 4-6% and 4-6%, respectively. Overall sales growth is projected in the range of 4-6%. Full-year adjusted earnings are envisioned in the band of $8.80-$8.95 per share. The guidance for operating cash flow and FCF is within $1.2-$1.4 billion and $800-$1,000 million, respectively.
Zacks Rank & Key Picks
GPC currently has a Zacks Rank #2 (Buy).
A few better-ranked players in the auto space include Wabash National (WNC - Free Report) , Modine Manufacturing (MOD - Free Report) and Hyliion (HYLN - Free Report) . WNC and MOD sport a Zacks Rank #1 (Strong Buy) and HYLN carries a Zacks Rank #2 (Buy).
Wabash is one of the leading manufacturers of semi-trailers in North America. The Zacks Consensus Estimate for WNC’s 2023 sales and earnings implies year-over-year growth of 13.06% and 24%, respectively.
Modine designs and manufactures world-class thermal dynamic equipment for today's agricultural, mining & construction equipment. The Zacks Consensus Estimate for MOD’s 2023 sales and earnings implies year-over-year growth of 11.43% and 43.09%, respectively.
Hyliion provides electrified powertrain solutions for Class 8 commercial vehicles. The Zacks Consensus Estimate for HYLN’s 2023 sales implies year-over-year growth of 538.07%.
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Genuine Parts (GPC) Q4 Earnings & Sales Beat, Increase Y/Y
Genuine Parts (GPC - Free Report) reported fourth-quarter 2022 adjusted earnings of $2.05 per share, up 14.5% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $1.90 per share. Higher-than-expected sales and operating profits across both of its segments resulted in this outperformance.
The company reported net sales of $5,524 million, outpacing the Zacks Consensus Estimate of $5,349 million. The top line rose 15% year over year. The upside resulted from growth in comparable sales across both the segments and benefit from acquisitions, partly offset by a net unfavorable impact of foreign currency translation, to the tune of 4.1%.
Genuine Parts Company Price, Consensus and EPS Surprise
Genuine Parts Company price-consensus-eps-surprise-chart | Genuine Parts Company Quote
Segmental Performance
The Automotive segment’s net sales totaled $3,433 million in the reported quarter, surpassing the Zacks Consensus Estimate of $3,281 million. The top line was also up 7.6% year over year on the back of comparable sales growth and acquisition benefits. The segment’s comparable sales rose 8.2% year over year. Operating profit increased 11% to $295 million, topping the consensus mark of $281 million. Segment profit margin came in at 8.6%, up 30 basis points from the year-ago period.
The Industrial Parts segment’s net sales totaled $2,091 million, surpassing the consensus estimate of $1,997 million. The top line also rose 29.6% year over year on comparable sales growth and acquisition benefits. The sales growth reflects a 14.3% contribution from the buyout of Kaman Distribution Group. The segment’s comparable sales climbed 16.7% in the reported quarter. Operating profit rose 49.8% from the prior-year quarter to $230 million, which beat the consensus mark of $201 million. The profit margin of 11% expanded by 150 basis points in the fourth quarter of 2021.
Financial Performance
Genuine Parts had cash and cash equivalents worth $653.5 million as of Dec 31, 2022, declining from $714.7 million as of Dec 31, 2021. The company exited the fourth quarter with $2.2 billion in total liquidity, comprising $1.5 billion on the revolving credit facility and the remainder as cash/cash equivalents. Long-term debt increased to $3,076.7 million from $2,409.3 million as of Dec 31, 2021. The company generated free cash flow of $1.1 billion for the twelve months ended Dec 31, 2022.
2023 Guidance
Genuine Parts projects revenues from automotive and industrial sales to witness a year-over-year uptick of 4-6% and 4-6%, respectively. Overall sales growth is projected in the range of 4-6%. Full-year adjusted earnings are envisioned in the band of $8.80-$8.95 per share. The guidance for operating cash flow and FCF is within $1.2-$1.4 billion and $800-$1,000 million, respectively.
Zacks Rank & Key Picks
GPC currently has a Zacks Rank #2 (Buy).
A few better-ranked players in the auto space include Wabash National (WNC - Free Report) , Modine Manufacturing (MOD - Free Report) and Hyliion (HYLN - Free Report) . WNC and MOD sport a Zacks Rank #1 (Strong Buy) and HYLN carries a Zacks Rank #2 (Buy).
Wabash is one of the leading manufacturers of semi-trailers in North America. The Zacks Consensus Estimate for WNC’s 2023 sales and earnings implies year-over-year growth of 13.06% and 24%, respectively.
Modine designs and manufactures world-class thermal dynamic equipment for today's agricultural, mining & construction equipment. The Zacks Consensus Estimate for MOD’s 2023 sales and earnings implies year-over-year growth of 11.43% and 43.09%, respectively.
Hyliion provides electrified powertrain solutions for Class 8 commercial vehicles. The Zacks Consensus Estimate for HYLN’s 2023 sales implies year-over-year growth of 538.07%.
You can see the complete list of today’s Zacks #1 Rank stocks here.