24 Jul 2018
Parent company; Genuine Parts Company (GPC) have credited their recent record-breaking quarter on the acquisition of AAG in 2017. Their total sales included 3% comparable growth, of which 14% came from all of their recent acquisitions and a 0.5% benefit from foreign currency translation.
GPC have reported that their sales and earnings for the second quarter in 2018, which ended on the 30th June totalled a record $4.8 billion for the business. This total marks a 17.6 per cent year-on-year increase on the $4.1 billion that GPC previously made in the second quarter of 2017. As a result of this, sales in the automotive sector of the company were up 27.7 per cent for the quarter.
Paul Donahue, Genuine Parts’ President and CEO commented “We are pleased to report another quarter of record sales, driven by the favourable impact of strategic acquisitions and improved organic sales trends across our business segments. The positive shift in the underlying sales environment in the automotive business is especially encouraging and, combined with the execution of our plans to drive operating improvement, including plans to address our automotive margin, we are optimistic for improved margin trends as we move ahead.”
Sales for the six months ending June 30, 2018, were $9.4 billion, a 17.5% increase on the $8.0 billion that was made in the same period in 2017. Net income for the six months was $403.5 million and earnings per share on a diluted basis were $2.74. Before the transaction and other costs discussed above, adjusted net income was $420.0 million, or $2.85 per diluted share, for the six months.
Mr Donahue concluded, “We enter the second half of 2018 excited for the opportunities ahead at GPC. As we move forward with the planned spin-off of our Business Products Group, we remain committed to our core growth and higher-margin global automotive and industrial businesses. To this end, we are focused on the further strengthening of our core sales growth, maximizing the benefits of our acquisitions and effectively reducing our cost structure to improve our operating results and enhance our long-term sales and profit outlook.”
Genuine Parts Company have raised their sales guidance to 13 per cent to 1 per cent, an increase from 12 per cent to 13 per cent. They expect that their diluted earnings per share will range from $5.9 to $5.64 and have reiterated their earnings guidance for adjusted diluted earnings per share; excluding any transaction-related costs from $5.60 to $5.75. They also expect their tax rate to reduce to 25% from 26%.