U.S.A. stock market: Genuine Parts’ earnings soar on strong industrial demand

Genuine Parts Co., New York symbol GPC, distributes auto parts to over 4,800 independent stores in North America. The company also operates about 1,000 auto parts stores under the NAPA banner. Auto parts account for roughly 50% of its sales, and 52% of its earnings. The company also distributes industrial parts (33% of sales, 32% of earnings), office furniture (13%, 12%), and electrical equipment (4%, 3%). Genuine Parts’ exposure to a variety of businesses helps protect it from slowdowns in certain industries. Genuine is one of the companies we analyze in Wall Street Stock Forecaster newsletter, our newsletter for U.S.A stock market investing. In the three months ended June 30, 2011, Genuine Parts earned $151.8 million. That’s up 22.0% from $124.5 million a year earlier. Earnings per share rose 23.1%, to $0.96 from $0.78. That easily beat the consensus forecast of $0.89 a share. Sales rose 11.9%, to $3.2 billion from $2.8 billion. All of the company’s divisions reported higher sales, led by the electrical division, with a 28% rise. Genuine Parts’ strong balance sheet gives it plenty of room to keep expanding by buying other related firms. It usually focuses on smaller companies it can easily absorb. Its long-term debt of $250 million is a low 2.9% of its market cap. The company holds cash of $517.0 million, or roughly $3.29 a share. Genuine Parts is just one of the U.S.A. stock market investments we analyze in our Wall Street Stock Forecaster newsletter. You can get the latest issue, along with 5 in-depth Special Reports, access to our weekly Email/Telephone Hotlines and much more absolutely FREE when you subscribe now. Click here to learn how.

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Jim Bates

Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.

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