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Genuine Parts (GPC) Q2 Earnings Miss Estimates, Outlook Revised
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Genuine Parts Company (GPC - Free Report) reported second-quarter 2024 adjusted earnings of $2.44 per share, which missed the Zacks Consensus Estimate of $2.59 per share. The bottom line remained flat year over year.
The company reported net sales of $5.96 billion, missing the Zacks Consensus Estimate of $6.04 billion but inching up 0.8% year over year. This nominal increase was due to a 2.2% boost from acquisitions, offset by a 0.9% drop in comparable sales and a 0.5% impact from unfavorable foreign currency transactions.
Genuine Parts Company Price, Consensus and EPS Surprise
The Automotive segment’s net sales totaled $3.72 billion in the reported quarter, up 2% year over year on acquisition benefits. The top line also surpassed our estimate of $3.69 billion. The segment’s comparable sales fell 0.6% year over year. Operating profit decreased 4.7% to $314 million but surpassed our forecast of $304.9 million. Segment profit margin came in at 8.4%, down 60 basis points from the year-ago period.
The Industrial Parts segment’s net sales declined 1.1% year over year to $2.2 billion owing to a decline in comps and unfavorable forex translations. The top line also lagged our estimate of $2.36 billion. The segment’s comparable sales decreased 1.6% in the reported quarter. Operating profit decreased 2.3% from the prior-year quarter to $277 million and fell short of our projection of $298 million. The profit margin of 12.4% contracted 10 basis points year over year in the second quarter of 2024.
Financial Performance
Genuine Parts had cash and cash equivalents worth $555.3 million as of Jun 30, 2024, down from $1.1 billion as of Dec 31, 2023. Long-term debt decreased to $3.03 billion from $3.55 billion as of Dec 31, 2023. The company exited the second quarter with $2 billion in total liquidity, comprising $1.5 billion on the revolving credit facility and the remainder as cash/cash equivalents. The company generated free cash flow (FCF) of $352.7 million in the quarter under review.
Revised 2024 Guidance
For 2024, Genuine Parts expects revenues from automotive and industrial sales to witness year-over-year upticks of 1-3% and 0-2%, down from the previous estimated ranges of 2-4% and 3-5%, respectively. Overall sales growth is projected in the range of 1-3%, down from the previous estimated range of 3-5%. The company envisions adjusted earnings of $9.30 to $9.50, down from the previous estimate of $9.80-$9.95 per share. Operating cash flow is expected in the band of $1.3-$1.5 billion. FCF is projected between $800 million and $1 billion.
The consensus estimate for SZKMY’s 2025 earnings suggests year-over-year growth of 2.09%. EPS estimates for 2025 and 2026 have improved 38 cents and 15 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for HMC’s 2025 sales and earnings suggests year-over-year growth of 0.73%. EPS estimates for 2025 and 2026 have improved 4 cents each in the past seven days.
The Zacks Consensus Estimate for VLVLY’s 2024 earnings suggests year-over-year growth of 6.49%. EPS estimates for 2024 and 2025 have moved up 9 cents and 8 cents, respectively, in the past seven days.
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Genuine Parts (GPC) Q2 Earnings Miss Estimates, Outlook Revised
Genuine Parts Company (GPC - Free Report) reported second-quarter 2024 adjusted earnings of $2.44 per share, which missed the Zacks Consensus Estimate of $2.59 per share. The bottom line remained flat year over year.
The company reported net sales of $5.96 billion, missing the Zacks Consensus Estimate of $6.04 billion but inching up 0.8% year over year. This nominal increase was due to a 2.2% boost from acquisitions, offset by a 0.9% drop in comparable sales and a 0.5% impact from unfavorable foreign currency transactions.
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 $3.72 billion in the reported quarter, up 2% year over year on acquisition benefits. The top line also surpassed our estimate of $3.69 billion. The segment’s comparable sales fell 0.6% year over year. Operating profit decreased 4.7% to $314 million but surpassed our forecast of $304.9 million. Segment profit margin came in at 8.4%, down 60 basis points from the year-ago period.
The Industrial Parts segment’s net sales declined 1.1% year over year to $2.2 billion owing to a decline in comps and unfavorable forex translations. The top line also lagged our estimate of $2.36 billion. The segment’s comparable sales decreased 1.6% in the reported quarter. Operating profit decreased 2.3% from the prior-year quarter to $277 million and fell short of our projection of $298 million. The profit margin of 12.4% contracted 10 basis points year over year in the second quarter of 2024.
Financial Performance
Genuine Parts had cash and cash equivalents worth $555.3 million as of Jun 30, 2024, down from $1.1 billion as of Dec 31, 2023. Long-term debt decreased to $3.03 billion from $3.55 billion as of Dec 31, 2023. The company exited the second quarter with $2 billion in total liquidity, comprising $1.5 billion on the revolving credit facility and the remainder as cash/cash equivalents. The company generated free cash flow (FCF) of $352.7 million in the quarter under review.
Revised 2024 Guidance
For 2024, Genuine Parts expects revenues from automotive and industrial sales to witness year-over-year upticks of 1-3% and 0-2%, down from the previous estimated ranges of 2-4% and 3-5%, respectively. Overall sales growth is projected in the range of 1-3%, down from the previous estimated range of 3-5%. The company envisions adjusted earnings of $9.30 to $9.50, down from the previous estimate of $9.80-$9.95 per share. Operating cash flow is expected in the band of $1.3-$1.5 billion. FCF is projected between $800 million and $1 billion.
Zacks Rank & Key Picks
GPC currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the auto space are Suzuki Motor Corporation (SZKMY - Free Report) , Honda Motor Co., Ltd. (HMC - Free Report) and Volvo (VLVLY - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for SZKMY’s 2025 earnings suggests year-over-year growth of 2.09%. EPS estimates for 2025 and 2026 have improved 38 cents and 15 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for HMC’s 2025 sales and earnings suggests year-over-year growth of 0.73%. EPS estimates for 2025 and 2026 have improved 4 cents each in the past seven days.
The Zacks Consensus Estimate for VLVLY’s 2024 earnings suggests year-over-year growth of 6.49%. EPS estimates for 2024 and 2025 have moved up 9 cents and 8 cents, respectively, in the past seven days.