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Genuine Parts (GPC) Beats on Q2 Earnings, Raises '21 View

Genuine Parts Company GPC reported second-quarter adjusted earnings of $1.74 per share, up 31.8% year over year. The bottom line also surpassed the Zacks Consensus Estimate of $1.58 per share. Higher-than-expected revenues and profits across both Automotive and Industrial Parts segments resulted in this outperformance.

This Atlanta-based automotive replacement parts supplier reported net sales of $4,783.7 million, topping the Zacks Consensus Estimate of $4,388 million. The top-line figure was also higher than the year-ago quarter’s $3,823.2 million. This upside resulted from 19.5% growth in comparable sales, 4.1% forex gains and a 1.5% benefit from acquisitions.

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 — accounting for 67% of the firm’s total revenues — totaled $3,196.3 million for the reported quarter, up 28.1% year over year on the back of comps growth, favorable forex translations and acquisition benefits. The metric also surpassed the Zacks Consensus Estimate of $2,895 million. The segment’s comparable sales rose 21.1% year over year for the second quarter. Operating profit increased 32.8% year over year to $290.8 million and topped the consensus mark of $263 million.

The Industrial Parts segment’s net sales grew 19.6% from the year-ago quarter to $1,587.4 million on the back of comps growth, forex gains and buyout synergies. Revenues from the segment also beat the consensus estimate of $1,500 million. The segment’s comparable sales rose 16.4% for the reported quarter. Operating profit rose 38.1% from the prior-year quarter to $150.4 million and surpassed the consensus mark of $125 million.

Financial Tidbits

Genuine Parts — which shares space with LKQ Corporation LKQDorman Products DORM and SPX Corporation SPXC in the same industry — had cash and cash equivalents worth $987.4 million as of Jun 30, 2021. Long-term debt decreased to $2,472.9 million from $2,727.9 million recorded in the year-ago period. Free cash flow for the quarter under review totaled $361.8 million.

Guidance Raised

Genuine Parts — which presently carries a Zacks Rank #2 (Buy) — raised its 2021 guidance. The company now projects revenues from automotive and industrial sales to witness a year-over-year uptick of 11-13% and 6-8%, up from the prior guided range of 5-7% and 4-6%, respectively. Full-year adjusted earnings per share are envisioned in the band of $6.20-$6.35, suggesting a 5.4% increase from the mid-point of the prior forecast. Operating cash flow and free cash flow are projected in the band of $1.2-$1.4 billion and $900 million to $1.1 billion, up from the previous forecast of $1-$1.2 billion and $700-$900 million, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Genuine Parts Company (GPC): Free Stock Analysis Report
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