Genuine Parts Co. (GPC) has announced sales and earnings for the fourth quarter and 12 months ended Dec. 31, 2018.
Sales for the fourth quarter were $4.6 billion, a 9.4 percent increase compared to $4.2 billion for the same period in 2017. Net income for the fourth quarter was $186.7 million and earnings per share on a diluted basis were $1.27.
Before the impact of certain transaction and other costs incurred primarily related to the company’s acquisition of Alliance Automotive Group (AAG), adjusted net income was $198.4 million, or $1.35 per diluted share. Total sales for the fourth quarter included 4.6 percent comparable growth, approximately 6 percent from acquisitions and an approximate 1.2 percent negative impact from foreign currency translation.
Fourth quarter sales for the Automotive Group were up 11.4 percent, including an approximate 4 percent comparable sales increase, an approximate 9 percent benefit from acquisitions and an unfavorable foreign currency translation of approximately 2 percent. Sales for the Industrial Group were up 8.7 percent, including an approximate 7 percent comparable sales increase and 2 percent from acquisitions. Sales for the Business Products Group were up 1.6 percent consisting primarily of comparable sales growth.
Paul Donahue, president and CEO, commented, “We are pleased to report another solid quarter of improved results at Genuine Parts Co. For the second consecutive quarter, each of our business segments grew their revenues with positive core sales comparisons and, combined with the added benefit of our accretive acquisitions, which are performing well, we further improved our operating results and posted an overall increase in operating margin. We ended the fourth quarter with positive momentum and it is encouraging to see our teams execute on our plans and initiatives to drive continued sales and earnings growth.”
Sales for the 12 months ended Dec. 31, 2018, were $18.7 billion, a 15 percent increase compared to $16.3 billion for the same period in 2017. Net income for the 12 months was $810.5 million and earnings per share on a diluted basis were $5.50. Before the impact of the transaction and other costs primarily related to AAG (discussed above) and the attempted transaction to spin-off the company’s business products group, S.P. Richards, net of the favorable impact of a $12 million termination fee received, adjusted net income was $836.1 million, or $5.68 per diluted share, for the 12 months.
Donahue concluded, “In 2018, we set new sales and earnings records, and our team did an excellent job of improving working capital and generating strong cash flows. We also completed our first full year of operations in Europe and successfully combined EIS into Motion Industries to form a larger and stronger industrial business. With these and other accomplishments, and our plans in place for the new year, we are well-positioned to further strengthen our global platform in 2019, driving long-term sustainable growth and significant value for our shareholders.”
2019 Outlook
The company is establishing its full year 2019 sales guidance at up 3 percent to 4 percent, or up an adjusted 4 percent to 5 percent before an expected headwind from currency translation of 1 percent. The company’s guidance for diluted earnings per share is $5.75 to $5.90, or an adjusted $5.81 to $5.96 before the impact of the 1 percent currency headwind. GPC expects a tax rate of approximately 25 percent in 2019.
