Genuine Parts Company GPC is slated to release first-quarter 2024 results on Apr 18, before market open. The Zacks Consensus Estimate for earnings per share is pinned at $2.15, implying growth of 0.47% from the year-ago reported number. The consensus estimate has moved down 11 cents in the past 60 days.
The Zacks Consensus Estimate for revenues is pegged at $5.85 billion, suggesting a year-over-year increase of 1.39%. Genuine Parts surpassed earnings estimates in each of the trailing four quarters, the average surprise being 4.29%. This is depicted in the graph below:
Genuine Parts Company Price and EPS Surprise
Genuine Parts Company price-eps-surprise | Genuine Parts Company Quote
Q4 Highlights
In fourth-quarter 2023, GPC’s adjusted earnings per share of $2.26 surpassed the consensus mark of $2.20 and rose 10.2% year over year. High-than-expected profits from the Industrial Parts segment resulted in the outperformance. The company reported net sales of $5.59 billion, lagging the Zacks Consensus Estimate of $5.63 billion. The top line, however, rose 1.2% year over year.
Factors at Play
Per S&P Global Mobility, the average age of light vehicles in the United States is 12.5 years. Aging vehicle increases the demand for automotive replacement parts, which is likely to have benefited GPC in the to-be-reported quarter. The growing number of miles driven and high vehicle financing costs are driving demand in the automotive aftermarket, enhancing segmental revenues. The Industrial division is also experiencing revenue growth fueled by manufacturing expansion and a diverse customer and end-market portfolio.
The increase in revenues from both segments is likely to have bolstered the company’s overall first-quarter performance. Segment-wise, our estimate for first-quarter revenues from the Automotive unit is pegged at $3.54 billion, indicating a rise from $3.50 billion recorded in the corresponding quarter of 2023. Our estimate for first-quarter revenues from Industrial is pinned at $2.31 billion, indicating a rise from $2.26 billion recorded in the corresponding quarter of 2023.
However, the company has been bearing the brunt of increasing selling, general and administrative costs for the past several quarters, which is denting operating profits, and the trend is likely to have continued in the first quarter. GPC is focused on developing and upgrading its offerings to remain on par with the evolving trends in the automotive market. The new features and component designs require high capital expenditure, which might have limited the company’s cash flows in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for GPC this time around. A positive Earnings ESP, when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the odds of an earnings beat. This is not the case here.
Earnings ESP: GPC has an Earnings ESP of +0.62%. This is because the Most Accurate Estimate is pegged higher than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: GPC currently carries a Zacks Rank #4 (Sell).
Stocks With the Favorable Combination
Here are some players from the auto space that, per our model, have the correct ingredients to post an earnings beat this time.
General Motors Company GM is set to release first-quarter 2024 results on Apr 23. The company has an Earnings ESP of +4.37% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GM’s to-be-reported quarter’s earnings and revenues is pegged at $2.06 per share and $40.61 billion, respectively. General Motors surpassed earnings estimates in each of the trailing four quarters, the average surprise being 19.95%.
BorgWarner Inc. BWA is scheduled to release first-quarter 2024 results on May 2. The company has an Earnings ESP of +0.87% and a Zacks Rank #3 at present.
The Zacks Consensus Estimate for BWA’s to-be-reported quarter’s earnings and revenues is pegged at 88 cents per share and $3.54 billion, respectively. BorgWarner surpassed earnings estimates in two of the trailing four quarters and missed twice, the average surprise being 4.84%.
American Axle & Manufacturing Holdings, Inc. AXL is slated to release first-quarter 2024 results on May 3. The company has an Earnings ESP of +674.43% and a Zacks Rank #3 at present.
The Zacks Consensus Estimate for AXL’s to-be-reported quarter’s earnings and revenues is pegged at 1 cent per share and $1.52 billion, respectively. American Axle surpassed earnings estimates in three of the trailing four quarters and missed once, the average surprise being 0.52%.
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Genuine Parts Company (GPC) : Free Stock Analysis Report
BorgWarner Inc. (BWA) : Free Stock Analysis Report
American Axle & Manufacturing Holdings, Inc. (AXL) : Free Stock Analysis Report
General Motors Company (GM) : Free Stock Analysis Report