Upcoming AWS Coverage on Tractor Supply Post-Earnings Results

LONDON, UK / ACCESSWIRE / April 25, 2017 / Active Wall St. announces its post-earnings coverage on Genuine Parts Co. (NYSE: GPC). The Company disclosed its first quarter fiscal 2017 results on April 19, 207. The auto and industrial parts distributor reported a 5% increase in sales and 3% hike in EPS. Register with us now for your free membership at:

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One of Genuine Parts' competitors within the Specialty Retail, Other space, Tractor Supply Co. (NASDAQ: TSCO), announced in a press release providing business update for the first quarter ended April 01, 2017, that it intends to release its full Q1 2017 results after the market closes on Wednesday, April 26, 2017. AWS will be initiating a research report on Tractor Supply in the coming days.

Today, AWS is promoting its earnings coverage on GPC; touching on TSCO. Get our free coverage by signing up to:

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Earnings Reviewed

Genuine Parts' sales for the first quarter ended March 31, 2017 was $3.91 billion, up 5% compared to sales of $3.72 billion for the same period in 2016. The Company's revenue numbers surpassed analysts' consensus of $3.85 billion.

For Q1 2017, Genuine Parts gross margin was 29.6% compared to 29.7% in Q1 2016, with the slight decrease primarily related to lower supplier incentives. The Company expects these incentives to improve over the balance of the year. Genuine Parts' total operating profit in the reported quarter increased by 1% and its operating profit margin was 7.3% compared to 7.7% in the year ago same period.

Genuine Parts' net income for Q1 2017 was $160.2 million compared to $158.0 million recorded for the prior year's comparable period. Earnings per share on a diluted basis were $1.08, up 3% from $1.05 for Q1 2016. The Company's earnings exceeded Wall Street's estimates of $1.05 per share.

Segment Results

For Q1 2017, Genuine Parts' Automotive Group revenue totaled $2.0 billion up 3.4%, including an approximate 0.5% comparable sales increase on a y-o-y basis. The segment's operating profit of $152 million declined 1% with the operating margin of 7.6% compared to 8.0% in the year earlier quarter, primarily due to the deleveraged expenses in the Company's US operations.

During Q1 2017, sales at Motion Industries, Genuine Parts' Industrial Group, were up 7%, including a 3% comparable sales increase to $1.2 billion. The segment's operating profit of $90 million grew 10%, while its operating margin improved to 7.3% compared to 7.1% last year. This segment benefited from stronger overall sales growth, favorable product mix shifts and the positive impact of their cost savings.

Sales at Genuine Parts' Electrical/Electronic Group were up 5% to 184 million, with comparable sales up 2.5%. The segment's operating profit of $14 million declined 8%, and the margin for the group was 7.4% in the reported quarter compared to 8.4% in the year ago period.

Genuine Parts' Office Products Group's revenues were $519 million for Q1 2017, up 9% on a y-o-y basis. The segment's operating profit of $31 million was down 9% and operating margin was 6.0%.

Cash Flow and Balance Sheet

As of March 31, 2017, Genuine Parts had cash of $177.92 million compared to cash of $205.14 million as on March 31, 2016. The Company's accounts receivable of $2.1 billion grew 5% from the prior year. Genuine Parts' inventory at quarter end was $3.3 billion, up 7% from March of last year. Accounts payable of $3.2 billion at March 31, 2017, was up 9% from the prior year due to the increased level of purchases, the ongoing benefit of improved payment terms as well as acquisitions.

Genuine Parts' total debt of $1 billion at March 31, 2017, compared to $700 million in debt March, 2016, and the Company's total debt to capitalization is approximately 24%. In Q1 2017, Genuine Parts' generated cash from operations of $102 million. As per its initial guidance, Genuine Parts is still forecasting cash from operations of approximately $950 million and free cash flow, which excludes capital expenditures and the dividend, to be approximately $400 million. The Company purchased 1 million shares in Q1 2017 and as per the earnings conference call the Company have 3.2 million shares authorized and available for repurchase.

Genuine Parts' investment in capital expenditures was $25 million in Q1 2017, an increase from the $12 million last year. For the year, the Company is planning for capital expenditures in the range of $145 million to $160 million. Genuine Parts' annual dividend of $2.70 represents a 3% increase from 2016 and is approximately 57% of its FY16 earnings.

Merle Acquisition

In a separate press release Genuine Parts announced the acquisition for its US Automotive Parts Group. The Company entered into a definitive agreement to acquire Merle's Automotive Supply (Merle's), with an effective close date of May 01, 2017. Merle's, founded in 1969 and based in Tucson, Arizona, is a 14-location automotive parts distributor serving both the commercial and retail markets in the greater Tucson and southern Arizona area. The addition of Merle's will consolidate into the Company's US automotive operations and is expected to generate approximate annual revenues of $45 million.

Outlook

Genuine Parts expects sales to be up 3% to 4% for FY17, which is unchanged from the initial guidance. The Company raised its outlook for diluted earnings per share to $4.75 to $4.85 compared to the initial outlook of $4.70 to $4.80.

Stock Performance

At the close of trading session on Monday, April 24, 2017, Genuine Parts' stock price rose slightly by 0.53% to end the day at $93.60. A total volume of 938.17 thousand shares were exchanged during the session, which was above the 3-month average volume of 718.03 thousand shares. The Company's shares are trading at a PE ratio of 20.27 and have a dividend yield of 2.88%. At Monday's closing price, the stock's net capitalization stands at $13.74 billion.

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SOURCE: Active Wall Street