Genuine Parts Co. has announced its sales and earnings for the third quarter and nine months ended Sept. 30, 2018.
Sales for the third quarter were $4.7 billion, a 15.3 percent increase compared to $4.1 billion for the same period in 2017. Net income for the third quarter was $220.2 million and earnings per share on a diluted basis were $1.49.
Before the net impact of certain transaction and other costs incurred related to the company’s fourth quarter 2017 acquisition of Alliance Automotive Group (AAG) in Europe and the attempted transaction to spin-off the company’s Business Products Group, S.P. Richards, and the favorable impact of a $12 million termination fee, adjusted net income was $217.6 million, or $1.48 per diluted share.
Total sales for the third quarter included 4.3 percent comparable growth, approximately 12 percent from acquisitions, including AAG, and an approximate 1 percent negative impact from foreign currency translation.
Third quarter sales for the Automotive Group were up 23.3 percent, including an approximate 3 percent comparable sales increase and the benefit of acquisitions, partially offset by unfavorable foreign currency translation of approximately 2 percent. Sales for the Industrial Group were up 8.3 percent, including an approximate 7 percent comparable sales increase, and sales for the Business Products Group were up 1.3 percent consisting primarily of comparable sales growth.
Paul Donahue, president and CEO, said strengthening sales were driven by positive sales comps across all of GPC’s business segments, in addition to the positive impact of recent acquisitions.
“In addition, our teams made progress in driving operating improvement, resulting in an improved operating margin for the automotive and industrial segments and the company overall,” said Donahue. “We also did an excellent job of managing our working capital, which contributed to the strong cash flows for the quarter.”
Sales for the nine months ended Sept. 30 were $14.1 billion, a 16.8 percent increase compared to $12.1 billion for the same period in 2017. Net income for the nine months was $623.8 million and earnings per share on a diluted basis were $4.23. Before the transaction and other costs discussed above, adjusted net income was $637.6 million, or $4.33 per diluted share, for the nine months.
Donahue concluded, “We enter the fourth quarter of 2018 with positive momentum and plans for continued sales and earnings growth. We remain focused on the further strengthening of our core sales growth, maximizing the benefits of our acquisitions and improving our operating results to further enhance our long-term sales and profit outlook. As always, we will support these initiatives with a strong balance sheet and continued strong cash flows.”
2018 Outlook
The company is raising its sales guidance to be up 14 to 15 percent, an increase from the prior guidance of up 13 to 14 percent. GPC says it expects diluted earnings per share to range from $5.50 to $5.60 and the company also is updating its guidance for adjusted diluted earnings per share, which excludes any transaction-related costs, to $5.60 to $5.70 from $5.60 to $5.75. GPC continues to expect a full-year tax rate of approximately 25 percent.
