Genuine Parts Co.'s (GPC) second-quarter profit rose 20%, topping Wall Street's forecasts, as the parts distributor and seller saw continued strength in its automotive segment.
Chairman and Chief Executive Thomas Gallagher expressed encouragement by the results so far in 2010 and "we are optimistic that we can show continued progress over the balance of the year."
The operator of the NAPA chain of automotive-parts stores has seen results helped recently by strength in its automotive segment. But Gallagher again on Friday praised the performance of the industrial and electrical arms, which serve the manufacturing sector and have bounced off of recessionary woes. The company, like others in the sector, weathered the economic downturn relatively well as consumers turned to fixing old vehicles rather than buying new ones.
Genuine Parts reported a profit of $124.5 million, or 78 cents a share, up from $103.6 million, or 65 cents, a year earlier. Revenue jumped 12% to $2.85 billion.
Analysts polled by Thomson Reuters had most recently forecast earnings of 71 cents on $2.7 billion in revenue.
Gross margin fell to 28.9% from 29.4%, but that was more than offset by operating costs rising just 7.4%.
The company's automotive segment - its biggest - saw revenue increase 7.3% while profit grew 7%. The industrial segment reported a 26% sales jump and profit nearly doubled, while the electrical group had a 37% earnings increase 37% as revenue climbed 32%.
Shares closed at $42.15 Thursday and were inactive premarket. The stock has risen 23% in the past year.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855; email@example.com