Genuine Parts Misses Q4 Estimates and Lowers Guidance
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy GPC?
Source: seekingalpha
- Sales Growth Analysis: Genuine Parts reported Q4 sales of $6.0 billion, reflecting a 4.1% year-over-year increase, driven by a 1.7% rise in comparable sales, a 1.5% contribution from acquisitions, and a net 0.9% favorable impact from foreign currency and other factors, indicating strong performance in North America Automotive, International Automotive, and Industrial segments.
- Gross Margin Impact: Despite the sales increase, the company's gross profit was adversely affected by $160 million in non-recurring charges primarily related to expected credit losses and amounts due from a vendor that filed for Chapter 11 bankruptcy, although adjusted gross profit margin improved by 70 basis points to 37.6% compared to the previous year.
- Future Outlook: Genuine Parts anticipates total sales growth of 3% to 5.5% for 2026, with adjusted diluted earnings per share projected between $7.50 and $8.00, which is below the consensus estimate of $7.64, reflecting a cautious outlook on future growth.
- Company Split Plan: Genuine Parts confirmed plans to separate into two independent publicly traded companies by Q1 2027, comprising an Automotive Parts Group and an Industrial Parts Group, aiming to enhance market focus and investment efficiency, which is expected to provide tax benefits for shareholders.
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Analyst Views on GPC
Wall Street analysts forecast GPC stock price to rise
4 Analyst Rating
3 Buy
1 Hold
0 Sell
Strong Buy
Current: 120.910
Low
146.00
Averages
148.67
High
150.00
Current: 120.910
Low
146.00
Averages
148.67
High
150.00
About GPC
Genuine Parts Company is a global service provider of automotive and industrial replacement parts and value-added solutions. The Company’s segments include Automotive Parts Group (Automotive) and Industrial Parts Group (Industrial). The Automotive segment distributes replacement parts (other than collision parts) for all makes and models of automobiles, trucks, and other vehicles in North America, Europe and Australasia. Its main automotive customers are repair and maintenance shops, and its main industrial customers are businesses operating distribution, manufacturing and production equipment. The Industrial segment distributes a wide variety of industrial bearings, mechanical and fluid power transmission equipment, including hydraulic and pneumatic products, material handling components and related parts and supplies. Its industrial business offers replacement parts and solutions to maintenance, repair and operation (MRO) customers and original equipment manufacturer (OEM) customers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Genuine Parts Misses Q4 Estimates and Lowers Guidance
- Sales Growth Analysis: Genuine Parts reported Q4 sales of $6.0 billion, reflecting a 4.1% year-over-year increase, driven by a 1.7% rise in comparable sales, a 1.5% contribution from acquisitions, and a net 0.9% favorable impact from foreign currency and other factors, indicating strong performance in North America Automotive, International Automotive, and Industrial segments.
- Gross Margin Impact: Despite the sales increase, the company's gross profit was adversely affected by $160 million in non-recurring charges primarily related to expected credit losses and amounts due from a vendor that filed for Chapter 11 bankruptcy, although adjusted gross profit margin improved by 70 basis points to 37.6% compared to the previous year.
- Future Outlook: Genuine Parts anticipates total sales growth of 3% to 5.5% for 2026, with adjusted diluted earnings per share projected between $7.50 and $8.00, which is below the consensus estimate of $7.64, reflecting a cautious outlook on future growth.
- Company Split Plan: Genuine Parts confirmed plans to separate into two independent publicly traded companies by Q1 2027, comprising an Automotive Parts Group and an Industrial Parts Group, aiming to enhance market focus and investment efficiency, which is expected to provide tax benefits for shareholders.
See More
Genuine Parts Considers Business Split
- Business Split Consideration: Genuine Parts is reportedly contemplating a split of its automotive and industrial parts businesses into two separate public companies, with an announcement expected as soon as Tuesday, which could enhance overall market value and operational flexibility.
- Financial Advisor Review: According to a report by The Wall Street Journal, the decision follows a review by financial advisors, indicating the company's proactive approach to optimizing its business structure in response to market dynamics.
- Earnings Report Date: Genuine Parts is scheduled to release its fourth-quarter and fiscal year 2025 results on Tuesday, with investors closely monitoring performance metrics to assess the potential impact of the split plan.
- Positive Market Reaction: In pre-market trading on Tuesday, Genuine Parts shares rose more than 1%, reflecting a positive market response to the split news, although retail sentiment on Stocktwits remained in the 'neutral' range.
See More
Genuine Parts Co. Set for Potential Dividend Run Ahead of Ex-Dividend Date
- Dividend Overview: Genuine Parts Co. (NYSE: GPC) is set to pay a dividend of $1.062 per share on March 6, 2026, which is expected to attract investor interest, especially given its implied annual yield of 3.52%.
- Historical Performance Analysis: Reviewing GPC's last four dividend payments, employing a strategy of buying two weeks prior to the ex-dividend date resulted in capital gains exceeding the dividend amount in all four instances, totaling $12.92 in gains, demonstrating the strategy's effectiveness.
- Market Reaction Expectations: Leading up to the ex-dividend date, GPC's stock price increased by $4.93 over the past two weeks, indicating positive market sentiment regarding the upcoming dividend payment, which may further drive the stock price higher.
- Investment Strategy Recommendation: For investors focused on Dividend Runs, GPC represents a stock worth monitoring, with a recommendation to position themselves ahead of the ex-dividend date to capture both the dividend and potential capital appreciation.
See More
US Stocks Close Higher on Strong Economic Data
- Strong Economic Data: US December capital goods new orders rose 0.6% month-over-month, exceeding expectations of 0.3%, indicating a rebound in capital spending that boosts market confidence and drives stock prices higher.
- Housing Market Recovery: December housing starts increased by 6.2% month-over-month to 1.404 million, significantly surpassing the expected 1.304 million, suggesting a recovery in the housing market that could stimulate investment and consumption in related sectors.
- Manufacturing Production Growth: January manufacturing production rose by 0.6% month-over-month, stronger than the expected 0.4%, marking the largest increase in 11 months, indicating a recovery in manufacturing that supports overall economic growth expectations.
- Optimistic Stock Market Performance: Over 75% of S&P 500 companies reported earnings that beat expectations, with Q4 earnings growth projected at 8.4%, providing strong support for the stock market despite lingering doubts about future interest rate policies.
See More
US Stock Markets Rise on Strong Economic Data
- Strong Economic Data: US December capital goods new orders rose 0.6% month-over-month, surpassing expectations of 0.3%, indicating a rebound in capital spending and boosting market confidence in economic recovery.
- Housing Market Recovery: December housing starts increased by 6.2% month-over-month to 1.404 million, significantly exceeding expectations of 1.304 million, suggesting a revival in the real estate market that could drive growth in related sectors.
- Manufacturing Production Growth: January manufacturing production rose 0.6% month-over-month, beating expectations of 0.4%, marking the largest increase in 11 months, which indicates a recovery momentum in manufacturing that may further propel economic growth.
- Optimistic Corporate Earnings: Over 75% of S&P 500 companies reported earnings that exceeded expectations, with Q4 earnings growth projected at 8.4%, which will further boost market sentiment and attract investor interest.
See More
US Stock Markets Rise on Positive Economic Data
- Strong Economic Data: US December capital goods new orders rose 0.6% month-over-month, exceeding expectations of 0.3%, indicating a rebound in capital spending that could further boost stock markets.
- Housing Market Recovery: December housing starts increased by 6.2% month-over-month to 1.404 million, significantly surpassing the expected 1.304 million, suggesting a recovery in the real estate market that may enhance investment confidence in related sectors.
- Manufacturing Production Growth: January manufacturing production rose 0.6% month-over-month, beating expectations of 0.4%, marking the largest increase in 11 months, which could strengthen market confidence in economic recovery.
- Optimistic Corporate Earnings: Over 75% of S&P 500 companies reported earnings that exceeded expectations, with Q4 earnings growth projected at 8.4%, reflecting ongoing improvements in corporate profitability that may further drive stock market gains.
See More
Genuine Parts Misses Q4 Estimates and Lowers Guidance
- Sales Growth Analysis: Genuine Parts reported Q4 sales of $6.0 billion, reflecting a 4.1% year-over-year increase, driven by a 1.7% rise in comparable sales, a 1.5% contribution from acquisitions, and a net 0.9% favorable impact from foreign currency and other factors, indicating strong performance in North America Automotive, International Automotive, and Industrial segments.
- Gross Margin Impact: Despite the sales increase, the company's gross profit was adversely affected by $160 million in non-recurring charges primarily related to expected credit losses and amounts due from a vendor that filed for Chapter 11 bankruptcy, although adjusted gross profit margin improved by 70 basis points to 37.6% compared to the previous year.
- Future Outlook: Genuine Parts anticipates total sales growth of 3% to 5.5% for 2026, with adjusted diluted earnings per share projected between $7.50 and $8.00, which is below the consensus estimate of $7.64, reflecting a cautious outlook on future growth.
- Company Split Plan: Genuine Parts confirmed plans to separate into two independent publicly traded companies by Q1 2027, comprising an Automotive Parts Group and an Industrial Parts Group, aiming to enhance market focus and investment efficiency, which is expected to provide tax benefits for shareholders.
See More
Genuine Parts Considers Business Split
- Business Split Consideration: Genuine Parts is reportedly contemplating a split of its automotive and industrial parts businesses into two separate public companies, with an announcement expected as soon as Tuesday, which could enhance overall market value and operational flexibility.
- Financial Advisor Review: According to a report by The Wall Street Journal, the decision follows a review by financial advisors, indicating the company's proactive approach to optimizing its business structure in response to market dynamics.
- Earnings Report Date: Genuine Parts is scheduled to release its fourth-quarter and fiscal year 2025 results on Tuesday, with investors closely monitoring performance metrics to assess the potential impact of the split plan.
- Positive Market Reaction: In pre-market trading on Tuesday, Genuine Parts shares rose more than 1%, reflecting a positive market response to the split news, although retail sentiment on Stocktwits remained in the 'neutral' range.
See More
Genuine Parts Co. Set for Potential Dividend Run Ahead of Ex-Dividend Date
- Dividend Overview: Genuine Parts Co. (NYSE: GPC) is set to pay a dividend of $1.062 per share on March 6, 2026, which is expected to attract investor interest, especially given its implied annual yield of 3.52%.
- Historical Performance Analysis: Reviewing GPC's last four dividend payments, employing a strategy of buying two weeks prior to the ex-dividend date resulted in capital gains exceeding the dividend amount in all four instances, totaling $12.92 in gains, demonstrating the strategy's effectiveness.
- Market Reaction Expectations: Leading up to the ex-dividend date, GPC's stock price increased by $4.93 over the past two weeks, indicating positive market sentiment regarding the upcoming dividend payment, which may further drive the stock price higher.
- Investment Strategy Recommendation: For investors focused on Dividend Runs, GPC represents a stock worth monitoring, with a recommendation to position themselves ahead of the ex-dividend date to capture both the dividend and potential capital appreciation.
See More
US Stocks Close Higher on Strong Economic Data
- Strong Economic Data: US December capital goods new orders rose 0.6% month-over-month, exceeding expectations of 0.3%, indicating a rebound in capital spending that boosts market confidence and drives stock prices higher.
- Housing Market Recovery: December housing starts increased by 6.2% month-over-month to 1.404 million, significantly surpassing the expected 1.304 million, suggesting a recovery in the housing market that could stimulate investment and consumption in related sectors.
- Manufacturing Production Growth: January manufacturing production rose by 0.6% month-over-month, stronger than the expected 0.4%, marking the largest increase in 11 months, indicating a recovery in manufacturing that supports overall economic growth expectations.
- Optimistic Stock Market Performance: Over 75% of S&P 500 companies reported earnings that beat expectations, with Q4 earnings growth projected at 8.4%, providing strong support for the stock market despite lingering doubts about future interest rate policies.
See More
US Stock Markets Rise on Strong Economic Data
- Strong Economic Data: US December capital goods new orders rose 0.6% month-over-month, surpassing expectations of 0.3%, indicating a rebound in capital spending and boosting market confidence in economic recovery.
- Housing Market Recovery: December housing starts increased by 6.2% month-over-month to 1.404 million, significantly exceeding expectations of 1.304 million, suggesting a revival in the real estate market that could drive growth in related sectors.
- Manufacturing Production Growth: January manufacturing production rose 0.6% month-over-month, beating expectations of 0.4%, marking the largest increase in 11 months, which indicates a recovery momentum in manufacturing that may further propel economic growth.
- Optimistic Corporate Earnings: Over 75% of S&P 500 companies reported earnings that exceeded expectations, with Q4 earnings growth projected at 8.4%, which will further boost market sentiment and attract investor interest.
See More
US Stock Markets Rise on Positive Economic Data
- Strong Economic Data: US December capital goods new orders rose 0.6% month-over-month, exceeding expectations of 0.3%, indicating a rebound in capital spending that could further boost stock markets.
- Housing Market Recovery: December housing starts increased by 6.2% month-over-month to 1.404 million, significantly surpassing the expected 1.304 million, suggesting a recovery in the real estate market that may enhance investment confidence in related sectors.
- Manufacturing Production Growth: January manufacturing production rose 0.6% month-over-month, beating expectations of 0.4%, marking the largest increase in 11 months, which could strengthen market confidence in economic recovery.
- Optimistic Corporate Earnings: Over 75% of S&P 500 companies reported earnings that exceeded expectations, with Q4 earnings growth projected at 8.4%, reflecting ongoing improvements in corporate profitability that may further drive stock market gains.
See More
