Genuine Parts Co.'s (GPC) third-quarter profit fell a
less-than-expected 18% as its auto-parts business held up and the
company's industrial operations continued to slump.
But shares fell 2.1% in early treading to $38.14. The stock is
up about 14.7% the past 52 weeks, but just 1% in 2009.
Industrial-production declines have been canceling out the
benefits the operator of NAPA parts stores has seen from consumers'
patching up old vehicles instead of buying new ones. Chairman and
Chief Executive Thomas C. Gallagher noted Friday that the 0.8%
decrease in sales in Genuine Parts' auto group, its largest
business, was smaller than the first half of the year. Profit in
the unit fell 3.6%.
He added the company believes conditions are "stabilizing" in
the economy's manufacturing sector. Industrial-segment profit
plunged 53% on a 22% sales drop.
Companywide, earnings fell to $107.6 million, or 67 cents a
share, from $131 million, or 81 cents a share, a year earlier. Net
sales dropped 9.6% to $2.61 billion.
Analysts surveyed by Thomson Reuters expected earnings of 65
cents and revenue of $2.6 billion.
Gross margin slipped to 29.4% from 29.5%.
Genuine Parts is the largest member and majority owner of the
National Automotive Parts Association, a voluntary trade group that
distributes automotive replacement parts in North America. Genuine
Parts also distributes industrial parts, business products and
electrical components.
The company's latest results come three weeks after rival and
U.S. leader AutoZone Inc. (AZO) posted a 3% profit drop as
continued sales gains were overcome by higher costs.
-By Mike Barris, Dow Jones Newswires; 212-416-2330;
mike.barris@dowjones.com