Genuine Parts Cuts High End of 2016 Outlook Amid Profit Miss
July 19 2016 - 9:50AM
Dow Jones News
Genuine Parts Co. lowered the upper ended of its 2016 earnings
guidance as the automotive replacement-parts distributor reported
that its second-quarter earnings fell 2%.
Shares fell 5.6% to $96.23 in recent premarket trading as
per-share earnings and revenue fell shy of expectations. Through
Monday's close, the stock has declined 3.8% from a roughly 1 1/2
year high last week.
For the year, Genuine Parts lowered the upper end of its
per-share earnings outlook by a nickel and now expects $4.70 to
$4.75. Genuine Parts affirmed its guidance for total sales growth
of 1% to 2%.
The Atlanta company has continued to expand through
acquisitions. Its most recent deals include Auto-Camping Ltd.,
expanding its automotive import parts business in Canada, and its
deal for the janitorial and sanitation business of Rochester
Midland Corp., which supports its diversification strategy and its
S.P. Richards office products unit.
The company, which operates NAPA Auto Parts, said automotive
segment sales edged down 0.7% to $2.09 billion, while industrial
segment revenue fell 1.7%, office products revenue grew 0.8%, and
electrical and electronic materials sales declined 5.2%.
"This quarter our automotive sales along with our other
distribution businesses were all impacted by the challenging sales
environment," the company's new chief executive, company veteran
Paul Donahue, said in prepared remarks. "We offset some of this
impact with key sales and gross margin initiatives as well as tight
expense controls."
Over all, Genuine Parts reported a profit of $191.4 million,
down from $195.4 million a year earlier. On a per-share basis,
earnings were flat at $1.28 amid fewer shares outstanding. Revenue
decreased 1% to $3.9 billion as growth from acquisitions was mostly
offset by currency fluctuations.
Analysts polled by Thomson Reuters expected per-share profit of
$1.29 and revenue of $3.98 billion.
Overhead expenses eased by 0.4%.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
July 19, 2016 09:35 ET (13:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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