Genuine Parts 1Q Profit Up 13% As Non-Auto Operations Rebound

Date : 04/16/2010 @ 9:36AM
Source : Dow Jones News
Stock : Genuine Parts Company (GPC)
Quote : 88.63  -1.08 (-1.20%) @ 3:59PM

Genuine Parts 1Q Profit Up 13% As Non-Auto Operations Rebound

Genuine Parts (NYSE:GPC)
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Genuine Parts Co.'s (GPC) first-quarter earnings rose 13% on sales growth and cost containment, though gross margin fell.

Results topped expectations, but shares fell 0.9% to $45.00 in light premarket trading.

Chairman and Chief Executive Thomas Gallagher said, "We are the most encouraged by the sales results in our industrial and electrical groups." The parts distributor and seller was heavily impacted by the economic slowdown especially in those two businesses, which serve the manufacturing sector.

The operator of NAPA parts stores' automotive parts business, which has been somewhat recession-resistant as consumers repair old vehicles rather than buying new ones, has also slowed last year. But management said it has seen some recent rebound in that segment.

Genuine Parts reported a profit of $100.6 million, or 63 cents a share, up from $89.2 million, or 56 cents, a year earlier. Revenue increased 6% to $2.6 billion.

Analysts polled by Thomson Reuters had most recently forecast earnings of 61 cents on $2.52 billion in revenue.

Gross margin fell to 29.2% from 30%, but just a 2% rise in overhead costs offset that.

Genuine Parts' automotive segment -- its biggest -- saw revenue rise 6% while operating profit rose 1.7%. The industrial segment's revenue increased 9% and profit surged 43%, while the electrical segment's results rose 16% and 20%, respectively.

The company is the largest member and majority owner of the National Automotive Parts Association, a voluntary trade group that distributes automotive replacement parts in North America. Genuine Parts also distributes industrial parts, business products and electrical components.

-By Jodi Xu, Dow Jones Newswires; 212-416-3037;


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