Genuine Parts Co. (GPC) has announced sales and earnings for the first quarter ended March 31, 2018.
Sales for the first quarter were a record $4.6 billion, a 17.4 percent increase compared to $3.9 billion for the same period in 2017. Net income for the first quarter was $176.6 million and earnings per share on a diluted basis were $1.20. Before the impact of certain transaction-related costs incurred for the company’s fourth quarter 2017 acquisition of Alliance Automotive Group (AAG) in Europe, and a recently announced agreement to spin-off the company’s Business Products Group, S.P. Richards, adjusted net income was $186.5 million, or $1.27 per diluted share. Total sales for the first quarter included 2 percent organic growth, 14 percent from acquisitions, including AAG, and a 1 percent benefit from foreign currency translation.
First quarter sales for the Automotive Group were up 29.6 percent, including an approximate 1.5 percent comparable sales increase as well as the benefit of acquisitions and favorable foreign currency translation. Sales for the Industrial Group, which includes both Motion Industries and EIS, were up 8.3 percent, including a 5 percent comparable sales increase, and sales for the Business Products Group were down 4.8 percent for the quarter in both total and comparable sales.
Paul Donahue, president and CEO, commented, “We were pleased to complete the first quarter of 2018 with double-digit total sales growth, driven by increases in our core global automotive and industrial businesses. While our operating margins were challenged, we remain focused on the execution of our plans to drive additional operating improvement and better position the company for sustained long-term growth and profitability. With our recent announcement to spin-off the Business Products Group, we took an important step that will allow us to commit more resources and increase our focus on our core growth and higher-margin global businesses. This is an exciting time for Genuine Parts, and we look forward to effectively executing on the opportunities ahead.”
2018 Outlook
The company is maintaining its initial sales and earnings guidance and continues to expect sales to be up 12 to 13 percent and adjusted diluted earnings per share, which excludes any first quarter and future transaction-related costs, to be $5.60 to $5.75. The company currently expects a tax rate of approximately 26 percent, which is down slightly from the initial guidance of 26 to 27 percent in 2018.
