Genuine Parts Beats, Profits Up 16% - Analyst Blog
19 April 2012 - 11:45PM
Zacks
Genuine Parts Company (GPC) posted a 16% rise
in profit to $146.3 million or 93 cents per share in the first
quarter of 2012 from $126.5 million or 80 cents in the same quarter
of last year. With this, the auto parts maker outdid the Zacks
Consensus Estimate by 7 cents per share.
Sales in the quarter grew 7% to $3.2 billion, which was in line
with the Zacks Consensus Estimate. The improvement was attributable
to strong sales in mainly Automotive and Industrial segments.
Operating profit rose 5% to $690.9 million in the quarter from
$656.8 million a year ago, driven by higher gross profits.
Sales in the Automotive segment grew 6% to $1.5 billion driven
by the positive impact from sales initiatives and improving
fundamentals in the automotive industry. Sales in the Motion
Industries or Industrial segment scaled up 12% to $1.1 billion,
making it the best performing segment, driven by internal
strategies and a recovery in the economy.
Sales in the EIS or Electrical segment inched up 5% to $147.1
million with the recovery of the manufacturing sector of the
economy. However, sales in the S. P. Richards or Office Products
segment declined 1.5% to $426.2 million due to challenging
environment in the office products industry.
Genuine Parts had cash and cash equivalents of $424.4 million as
of March 31, 2012, down from $465.9 million as of March 31, 2011.
Long-term debt remained unchanged at $500 million as of March 31,
2012 compared with the year-ago level.
In the quarter, the company’s net cash flow from operations
improved significantly to $172.3 million from $53.4 million in the
prior-year, due to an improvement in profit and favorable changes
in operating assets and liabilities. Meanwhile, capital
expenditures increased to $16.9 million from $14.5 million in the
first quarter of 2011.
Genuine Parts has undertaken various initiatives to boost sales
and earnings, such as product line expansion, penetration into new
markets and cost-saving activities. The company relies on a diverse
product portfolio for top-line and bottom-line growth. Its major
competitors include Advance Auto Parts (AAP),
AutoZone (AZO) and W.W. Grainger
(GWW).
Currently, the company retains a Zacks #2 Rank on its stock,
which translates to a Buy rating for the short term (1–3
months).
ADVANCE AUTO PT (AAP): Free Stock Analysis Report
AUTOZONE INC (AZO): Free Stock Analysis Report
GENUINE PARTS (GPC): Free Stock Analysis Report
GRAINGER W W (GWW): Free Stock Analysis Report
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