Automotive replacement parts distributor Genuine Parts Co. (GPC) reported Friday a profit for the first quarter that edged down from last year, reflecting higher operating expenses. Both earnings per share and quarterly revenues missed analysts' expectations. Looking ahead, the company said it remains optimistic about the prospects for stronger sales and earnings over the balance of 2013, despite the rather slow start to the year.
"Entering 2013, we felt that the first quarter of the year would be our most challenging. Our earnings for the quarter are a direct reflection of the 0.6% sales increase," Chairman and CEO Tom Gallagher said in a statement.
The Atlanta, Georgia-based company reported net income of $144.39 million for the first quarter, down 1 percent from $146.26 million in the prior-year quarter, while earnings per share remained flat with last year at $0.93 per share.
On average, eight analysts polled by Thomson Reuters expected the company to earn $0.99 per share for the first quarter. Analysts' estimates typically exclude special items.
Meanwhile, net sales for the quarter edged up 0.6 percent to $3.20 billion from $3.18 billion in the same quarter last year, but missed seven Wall Street analysts' consensus estimate of $3.29 billion.
The company's automotive group sales were up 3 percent to $1.54 billion, while sales for industrial group declined 2 percent to $1.10 billion from a year ago. Sales for office products group decreased 1 percent to $420 million from last year, and electrical/electronic materials group sales totaled $139 million, down 5 percent from the prior-year quarter.
Operating expenses for the quarter grew to $699.61 million from $690.94 million in the year-ago quarter.
Genuine Parts completed the acquisition of the remaining 70 percent stake in Australian peer Exego Group in a $800 million deal, including assumption of about $160 million in net debt, in April 1, 2013. The company had previously purchased a 30 percent stake in the Exego Group on January 1, 2012.
The company noted that it is excited about the growth opportunities expected with the Exego team. Exego is a leading aftermarket distributor in Australasia and is now a wholly-owned subsidiary of Genuine Parts.
"Despite the rather slow start to the year, we remain optimistic about our prospects for stronger sales and earnings over the balance of 2013. Our sales initiatives and ongoing investments in the businesses, coupled with certain external indicators, bode well for our future growth," Gallagher added.
In Friday's regular trading session, GPC is currently trading at $72.25, down $3.05 or 4.05% on a volume of 0.21 million shares.
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