WASHINGTON (dpa-AFX) - Automotive aftermarket distributor Genuine Parts Co. (GPC) reported Monday a profit for the second quarter that declined nine percent from last year, despite sales growth across all four of its business segments, reflecting higher income taxes and operating expenses.
However, both earnings per share and quarterly sales topped analysts' expectations. Looking ahead, the company said it remains optimistic about the prospects for growth in each of its four businesses.
'In the second quarter, we again achieved our core objectives of growing sales and earnings, producing operating margin improvement, generating solid cash flows while maintaining a strong balance sheet,' Chairman and CEO Tom Gallagher said in a statement.
The Atlanta, Georgia-based company reported net income of $197.73 million or $1.28 per share for the second quarter, lower than $216.36 million or $1.39 per share in the prior-year quarter.
On average, ten analysts polled by Thomson Reuters expected the company to report earnings of $1.26 per share for the quarter. Analysts' estimates typically exclude special items.
The company noted that the re-measuremenet of its initial 30 percent investment following the acquisition of the remaining 70 percent interest in GPC Asia Pacific in April, along with the lower tax rate for the remeasurement, favorably impacted earnings for the latest quarter by $0.22 per share.
Net sales for the quarter grew 6 percent to a record $3.91 billion from $3.68 billion in the same quarter last year, and topped nine Wall Street analysts' consensus estimate of $3.87 billion by a whisker.
The company noted that the sales growth included a 2.5 percent contribution from acquisitions and 5 percent underlying sales growth, partially offset by a 1 percent headwind from currency.
The company's automotive group sales were up 5 percent to $2.11 billion, and sales for industrial group or motion industries, increased 7 percent to $1.21 billion from a year ago.
Sales for office products group or S. P. Richards, grew 4 percent to $419 million, and electrical/electronic materials group sales improved 32 percent to $188 million from the prior-year quarter.
Operating expenses for the quarter grew to $868.99 million from $790.38 million in the year-ago quarter. Income taxes totaled $112 million, compared to $98 million last year.
'We are both proud of and encouraged by this accomplishment and, looking ahead, we enter the second half of 2014 poised to demonstrate ongoing progress in driving improved results. We remain optimistic about our prospects for growth in each of our four businesses,' Gallagher added.
In Monday's regular trading session, GPC is currently trading at $88.56, up $1.37 or 1.57% on a volume of 28,449 shares. In the past 52-week period, the stock has been trading in a range of $76.26 to $90.00.
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