Genuine Parts Q3 Profit Meets View, But Warns On Q4

(RTTNews) - Automotive replacement parts distributor Genuine Parts Co. (GPC) on Monday reported a slight decline in profit for the third quarter from last year, reflecting lower sales at its industrial group segment as well as the negative impact of a strong U.S. dollar amid challenging global economic conditions.

However, earnings per share for the quarter were flat with last year and matched analysts' expectations, while revenues missed their estimates. Looking ahead, the company warned that it expects sales and earnings to be further challenged by softer market conditions in the fourth quarter.

Chairman and CEO Tom Gallagher said, "We enter the fourth quarter facing market conditions that have softened, most prominently in our Industrial and Electrical businesses. Based on these uncertain conditions, which are likely to persist through the balance of the year, we expect sales and earnings to be further challenged as we work our way through the final quarter of 2015."

The Atlanta, Georgia-based company's net income for the third quarter was $188.02 million, down from $190.52 million in the prior-year quarter. However, earnings per share were flat with last year at $1.24 per share.

On average, eleven analysts polled by Thomson Reuters expected the company to report earnings of $1.24 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter declined 2 percent to $3.92 billion from $3.99 billion in the same quarter last year and also missed analysts' consensus revenue estimate of $4.01 billion.

Genuine Parts noted that currency negatively impacted revenue growth by about 4 percent and earnings per share by $0.05 in the third quarter.

The company noted that the sales decline for the quarter included a 1 percent contribution from acquisitions as well as 1 percent underlying sales growth, partially offset by a currency headwind of 4 percent.

The company's automotive group sales declined 2 percent from last year to $2.06 billion and sales for industrial group or motion industries, decreased 4 percent to $1.22 billion.

Meanwhile, sales for office products group or S.P. Richards, grew 3 percent from to $510.83 million, and electrical/electronic materials group sales improved 2 percent to $196.84 million.

GPC is trading at $84.91, up $1.63 or 1.96 percent on a volume of 381,696 shares.