Genuine Parts Co. has announced sales and earnings for the fourth quarter and 12 months ended Dec. 31, 2017.
Sales for the fourth quarter ended Dec. 31, 2017, were $4.2 billion, an 11.3 percent increase compared to $3.8 billion for the same period in 2016. Net income for the fourth quarter was $108.2 million and earnings per share on a diluted basis were 73 cents. Alliance Automotive Group (AAG), the company’s European acquisition which closed on Nov. 2, 2017, contributed 6.8 percent to sales and 7 cents in earnings per diluted share during the fourth quarter.
Before the impact of AAG’s operations as discussed above, as well as excluding fourth quarter transaction-related costs and the expense for transition tax and the revaluation of deferred taxes resulting from the U.S. Tax Cuts and Jobs Act, adjusted net income was $165.5 million, or $1.12 per diluted share. Including the 7 cent contribution from AAG’s operations, adjusted earnings per diluted share were $1.19 for the fourth quarter of 2017.
Fourth quarter sales for the Automotive Group were up 16.7 percent including an approximate 1 percent comparable sales increase and a 4 percent total sales increase before the additional 13 percent sales contribution from AAG. Sales at Motion Industries, the Industrial Group, were up 7.4 percent, including a 5 percent comparable sales increase, and sales at EIS, the Electrical/Electronic Group, grew 8.9 percent, with comparable sales down 2 percent. Sales for S.P. Richards, the Business Products Group, were down 2.2 percent for the quarter in both total and comparable sales.
Paul Donahue, president and CEO, said, “We were pleased to complete the fourth quarter with a 4.5 percent sales increase before the added benefit of the AAG acquisition. Additionally, the two-month performance at AAG was in-line with our initial plan, and we remain excited for the growth prospects we see for this business across Europe. Overall, total sales for the fourth quarter included 2 percent organic growth, 8.5 percent from acquisitions and an approximate 1 percent foreign exchange benefit.”
Donahue added, “Importantly, our plans and initiatives to accelerate actions to improve our operating performance, which we emphasized following our third quarter results, had a positive impact on our fourth quarter. While we continue to focus on these efforts to drive further improvement, we are encouraged by our early progress.”
Sales for the 12 months ended Dec. 31, 2017, were $16.3 billion, a 6.3 percent increase compared to $15.3 billion for the same period in 2016. Net income for the 12 months was $617 million and earnings per share on a diluted basis were $4.18. AAG contributed 1.7 percent to sales and 7 cents in earnings per diluted share for the year.
Before the impact of AAG as discussed above, as well as transaction-related costs recorded in the third and fourth quarters of 2017 and the tax expense resulting from the Tax Cuts and Jobs Act recorded in the fourth quarter of 2017, adjusted net income was $686 million and adjusted earnings per diluted share were $4.64. Including the 7 cent contribution from AAG’s operations, adjusted earnings per diluted share were $4.71 for the year.
Donahue concluded, “Reflecting on 2017, GPC’s 90th year, we surpassed $16 billion in revenues, a new record for us. In addition, we better positioned the company for sustained long-term growth, with significant investments in our existing businesses as well as new ones, both in North America and abroad. Our balance sheet is in excellent condition, our cash flows are strong and our plans are in place for the year ahead.”
2018 Outlook
The company is establishing its full year 2018 sales guidance at up 12 percent to 13 percent and diluted earnings per share is expected to be $5.60 to $5.75, including the benefit of a full year of operations with AAG and approximately $80 million to $90 million in lower income taxes related to the Tax Cuts and Jobs Act. The company currently expects a tax rate of approximately 26 to 27 percent in 2018.
