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Analysis: Auto Parts Stocks Should Recover in 2018
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By NAPA
ATLANTA, July 23, 2024 /
link hidden, please login to view/ -- Genuine Parts Company (NYSE: GPC), a leading global distributor of automotive and industrial replacement parts, announced today its results for the second quarter ended June 30, 2024. "I want to thank each of our global GPC teammates for their hard work and dedication to serving our customers," said Will Stengel, President and Chief Executive Officer. "Our quarterly results reflect softer than expected market conditions, which are tempering demand particularly in our Industrial and U.S. and European Automotive businesses. Despite a challenging macro-environment, our teams are operating well and remain focused on executing our long-term strategic initiatives."
Second Quarter 2024 Results
Sales were $6.0 billion, a 0.8% increase compared to $5.9 billion in the same period of the prior year. The sales result is attributable to a 2.2% benefit from acquisitions, partially offset by a 0.9% decrease in comparable sales and 0.5% unfavorable impact of foreign currency and other.
Net income was $296 million, or $2.11 per diluted earnings per share. This compares to net income of $344 million, or $2.44 per diluted share in the prior year period.
Adjusted net income was $342 million which excludes a net expense of $46 million of after tax adjustments, or $0.33 per diluted share, in costs related to our global restructuring initiative and the acquisition of Motor Parts and Equipment Corporation. This compares to net income of $344 million for the same three-month period of the prior year, a decrease of 0.9%. On a per share diluted basis, adjusted net income was $2.44, in-line with the same period of the prior year. Refer to the reconciliation of GAAP net income to adjusted net income and GAAP diluted earnings per share to adjusted diluted earnings per share for more information.
Second Quarter 2024 Segment Highlights
Automotive Parts Group ("Automotive")
Global Automotive sales were $3.7 billion, up 2.0% from the same period in 2023, reflecting a 3.1% benefit from acquisitions, partially offset by a 0.6% decrease in comparable sales and 0.5% unfavorable impact of foreign currency and other. Segment profit of $314 million decreased 4.7%, with segment profit margin of 8.4%, down 60 basis points from last year.
Industrial Parts Group ("Industrial")
Industrial sales were $2.2 billion, down 1.1% from the same period in 2023, with a 0.7% benefit from acquisitions, offset by a 1.6% decrease in comparable sales and 0.2% unfavorable impact of foreign currency. Segment profit of $277 million decreased 2.3%, with segment profit margin of 12.4%, down 10 basis points from the same period of the prior year.
Six Months 2024 Results
Sales for the six months ended June 30, 2024 were $11.7 billion, up 0.6% from the same period in 2023. Net income for the six months was $544 million, or $3.89 per diluted share, compared to $4.58 per diluted share in the prior year period. Adjusted net income increased 0.6% to $652 million in the first half of 2024 compared to net income of $648 million in the prior year period. Adjusted diluted earnings per share was $4.66 compared to $4.58 in the prior year period, an increase of 1.7%.
Balance Sheet, Cash Flow and Capital Allocation
The company generated cash flow from operations of $612 million for the first six months of 2024. Net cash used in investing activities was $762 million, including $259 million for capital expenditures and $580 million for M&A. The company also used $382 million in cash for financing activities, including $272 million for quarterly dividends paid to shareholders and $75 million for stock repurchases. Free cash flow was $353 million for the first six months of 2024. Refer to the reconciliation of GAAP net cash provided by operating activities to free cash flow for more information.
The company ended the quarter with $2.0 billion of total liquidity. Total liquidity comprises of $555 million in cash and cash equivalents and $1.4 billion of our $1.5 billion revolving credit facility available after the effect of $100 million of commercial paper outstanding as of June 30, 2024.
2024 Outlook
The company is revising full-year 2024 guidance previously provided in its earnings release on April 18, 2024. The company considered its recent business trends and financial results, current growth plans, strategic initiatives, global economic outlook, geopolitical conflicts and the potential impact on results in updating its guidance, which is outlined in the table below.
For the Year Ending December 31, 2024
Previous Outlook
Updated Outlook
Total sales growth
3% to 5%
1% to 3%
Automotive sales growth
2% to 4%
1% to 3%
Industrial sales growth
3% to 5%
0% to 2%
Diluted earnings per share
$9.05 to $9.20
$8.55 to $8.75
Adjusted diluted earnings per share
$9.80 to $9.95
$9.30 to $9.50
Effective tax rate
Approximately 24%
Approximately 24%
Net cash provided by operating activities
$1.3 billion to $1.5 billion
$1.3 billion to $1.5 billion
Free cash flow
$800 million to $1.0 billion
$800 million to $1.0 billion
Non-GAAP Information
This release contains certain financial information not derived in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP"). These items include adjusted net income, adjusted diluted earnings per share and free cash flow. We believe that the presentation of adjusted net income, adjusted diluted earnings per share and free cash flow, when considered together with the corresponding GAAP financial measures and the reconciliations to those measures, provide meaningful supplemental information to both management and investors that is indicative of our core operations. We considered these metrics useful to investors because they provide greater transparency into management's view and assessment of our ongoing operating performance by removing items management believes are not representative of our operations and may distort our longer-term operating trends. For example, for the three and six months ended June 30, 2024, adjusted net income and adjusted diluted earnings per share exclude costs relating to our global restructuring initiative and acquisition of Motor Parts and Equipment Corporation, which are one-time events that do not recur in the ordinary course of our business. We believe these measures are useful and enhance the comparability of our results from period to period and with our competitors, as well as show ongoing results from operations distinct from items that are infrequent or not associated with our core operations. We do not, nor do we suggest investors should, consider such non-GAAP financial measures as superior to, in isolation from, or as a substitute for, GAAP financial information. We have included a reconciliation of this additional information to the most comparable GAAP measure following the financial statements below. We do not provide forward-looking guidance for certain financial measures on a GAAP basis because we are unable to predict certain items contained in the GAAP measures without unreasonable efforts. These items may include acquisition-related costs, litigation charges or settlements, impairment charges, and certain other unusual adjustments.
Comparable Sales
Comparable sales is a key metric that refers to period-over-period comparisons of our sales excluding the impact of acquisitions, foreign currency and other. Our calculation of comparable sales is computed using total business days for the period. The company considers this metric useful to investors because it provides greater transparency into management's view and assessment of the company's core ongoing operations. This is a metric that is widely used by analysts, investors and competitors in our industry, although our calculation of the metric may not be comparable to similar measures disclosed by other companies, because not all companies and analysts calculate this metric in the same manner.
Conference Call
Genuine Parts Company will hold a conference call today at 8:30 a.m. Eastern Time to discuss the results of the quarter. A supplemental earnings deck will also be available for reference. Interested parties may listen to the call and view the supplemental earnings deck on the
link hidden, please login to view. The call is also available by dialing 800-836-8184. A replay of the call will be available on the company's website or toll-free at 888-660-6345, conference ID 93997#, two hours after the completion of the call. About Genuine Parts Company
Established in 1928, Genuine Parts Company is a leading global service organization specializing in the distribution of automotive and industrial replacement parts. Our Automotive Parts Group operates across the U.S., Canada, Mexico, Australasia, France, the U.K., Ireland, Germany, Poland, the Netherlands, Belgium, Spain and Portugal, while our Industrial Parts Group serves customers in the U.S., Canada, Mexico and Australasia. We keep the world moving with a vast network of over 10,700 locations spanning 17 countries supported by more than 60,000 teammates. Learn more at
link hidden, please login to view. Forward-Looking Statements
Some statements in this release, as well as in other materials we file with the Securities and Exchange Commission (SEC), release to the public, or make available on our website, constitute forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements in the future tense and all statements accompanied by words such as "expect," "likely," "outlook," "forecast," "preliminary," "would," "could," "should," "position," "will," "project," "intend," "plan," "on track," "anticipate," "to come," "may," "possible," "assume," or similar expressions are intended to identify such forward-looking statements. These forward-looking statements include our view of business and economic trends for the remainder of the year, our expectations regarding our ability to capitalize on these business and economic trends and to execute our strategic priorities, and the revised full-year 2024 financial guidance provided above. Senior officers may also make verbal statements to analysts, investors, the media and others that are forward-looking.
We caution you that all forward-looking statements involve risks and uncertainties, and while we believe that our expectations for the future are reasonable in view of currently available information, you are cautioned not to place undue reliance on our forward-looking statements. Actual results or events may differ materially from those indicated as a result of various important factors. Such factors may include, among other things, changes in general economic conditions, including unemployment, inflation (including the impact of tariffs) or deflation, financial institution disruptions and geopolitical conflicts such as the conflict between Russia and Ukraine, the conflict in the Gaza strip and other unrest in the Middle East; volatility in oil prices; significant cost increases, such as rising fuel and freight expenses; public health emergencies, including the effects on the financial health of our business partners and customers, on supply chains and our suppliers, on vehicle miles driven as well as other metrics that affect our business, and on access to capital and liquidity provided by the financial and capital markets; our ability to maintain compliance with our debt covenants; our ability to successfully integrate acquired businesses into our operations and to realize the anticipated synergies and benefits; our ability to successfully implement our business initiatives in our two business segments; slowing demand for our products; the ability to maintain favorable supplier arrangements and relationships; changes in national and international legislation or government regulations or policies, including changes to import tariffs, environmental and social policy, infrastructure programs and privacy legislation, and their impact to us, our suppliers and customers; changes in tax policies; volatile exchange rates; our ability to successfully attract and retain employees in the current labor market; uncertain credit markets and other macroeconomic conditions; competitive product, service and pricing pressures; failure or weakness in our disclosure controls and procedures and internal controls over financial reporting, including as a result of the work from home environment; the uncertainties and costs of litigation; disruptions caused by a failure or breach of our information systems, as well as other risks and uncertainties discussed in our Annual Report on Form 10-K for 2023 and from time to time in our subsequent filings with the SEC.
Forward-looking statements speak only as of the date they are made, and we undertake no duty to update any forward-looking statements except as required by law. You are advised, however, to review any further disclosures we make on related subjects in our subsequent Forms 10-K, 10-Q, 8-K and other reports filed with the SEC.
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By Max
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By 袁春凤 (Tiffany)
The phenomenon that two objects move relative to each other to produce motion resistance between their contact surfaces is called friction, which is called friction. The existence of friction not only increases the power consumption, but also causes the wear of parts' contact surfaces. Therefore, lubricating oil is usually used between the relative moving surfaces of automobile parts to reduce friction. Failure of automotive parts 75% is caused by friction.
Friction can be divided into dry friction, liquid friction, boundary friction and mixed friction according to the lubrication state of the parts.
(1) dry friction
The friction between the frictional surfaces without any lubricating medium is called dry friction.
When the parts are in the state of dry friction, the surface of the parts is abraded sharply, so the surface of the moving parts of the automobile should avoid the occurrence of dry friction as far as possible.
Dry friction and boundary friction are the main friction between the upper part of cylinder wall and piston ring. Dry friction will occur when the journal and bearing are subjected to impact load in the working process.
(2) liquid friction
Two the friction of the friction surface when the lubricant is completely separated is called liquid friction.
In liquid friction, the two friction surfaces are completely separated by a layer of lubricating oil film with a thickness of 1.5-2.0um, which avoids direct contact between the working surfaces of the two parts. Friction only occurs between the lubricating fluid molecules, so the friction resistance is very small, and the wear of the parts is very slight.
Most of the relative motion parts of a car are carried out under the condition of liquid friction (for example, crankshaft and bearing).
(3) boundary friction
Two friction surface separated by a very thin boundary film is called boundary friction.
The oil film thickness is usually below 0.1um. Friction only occurs between the outer molecules of the boundary film, reducing the friction and wear of the parts. But its thickness is very small, and it is easy to be destroyed by impact and high temperature, so it is not as reliable as liquid friction.
For example: between cylinder wall and piston ring; if the work crankshaft and journal between the insufficient supply of lubricant, easy to produce boundary friction.
(4) Mixed friction
The friction between two friction surfaces in the presence of dry friction, liquid friction and boundary friction is called mixed friction.
In the actual working state, the parts usually work under the mixed friction state, and the friction state varies with the working conditions.
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By Mia
Regular inspection and maintenance of the brake system not only ensure the safety and reliability of the vehicle but also effectively extend the lifespan of the brake system, improve brake performance, and guarantee driving safety.
The components of the brake system include the brake pedal, booster, master cylinder, brake lines, wheel cylinders or brake calipers, and friction materials. Common brake systems include disc brakes and drum brakes. KETULLA specializes in manufacturing disc brake pads.
We know that brake pads are crucial consumables in the brake system, and timely replacement is essential to maintain brake performance. Whether it’s wet, slippery, or snowy road conditions, contaminated friction materials, aging system components, or corrosion of components, regular inspection and timely replacement of brake pads are indispensable parts of brake maintenance.
Choosing high-quality replacement parts and using certified products and services not only enhance the performance of the brake system but also ensure driving safety.
Timely replacement of brake pads is crucial. Typically, brake pads are equipped with accessories such as brake pad wear indicators or sensors. Different vehicle models are matched with different brake pad warning devices; some use indicators, while others can be connected to the vehicle’s warning line. Once the brake pads wear to a certain extent, the warning line is triggered, emitting a squeaking sound to indicate the need for replacement because continuing to use worn brake pads is no longer safe.
The distance a vehicle can travel after the brake pad warning is activated varies depending on individual driving habits and conditions. Continuing to use worn brake pads may wear down the brake rotor, leading to brake rotor damage, and necessitating the replacement of both brake pads and rotors, which can be costly.
When should brake pads be replaced?
Brake pads generally need to be replaced after the vehicle has traveled approximately 60,000 kilometers. However, the warranty for KETULLA brake pads ranges from 30,000 to 50,000 kilometers, depending on driving habits and road conditions.
When the thickness of the brake pads approaches or falls below 0.3 centimeters, it’s time to replace them. If you hear friction noises when lightly pressing the brakes, immediate replacement is necessary. When the friction material thickness decreases to 8 millimeters, it’s advisable to inspect and possibly replace the brake pads. When the pad and steel plate thickness decreases to 3 millimeters, immediate replacement is recommended to avoid safety hazards.
The lifespan of brake pads typically falls between 30,000 to 50,000 kilometers, depending on driving habits and conditions. Warning signs for brake pad replacement include decreased braking performance, increased braking distances, and abnormal noises. Regular inspections are necessary to determine when brake pads need replacement.
New brake pads usually have a thickness of approximately 1 centimeter, with a usable limit of 3 millimeters. If brake pads are excessively worn, contaminated with oil, or show signs of abnormal wear or tearing, they should be replaced immediately. It’s essential to regularly check brake pad wear and replace them as needed. Replacement intervals may vary depending on the type of brake pads and driving conditions.
Regularly inspect the thickness of brake pads, and if worn to at least 1/4 inch, it’s time for replacement. The lifespan of brake pads depends on various factors, including driving style, vehicle type, and load conditions. Regular inspections are necessary to determine when replacement is needed.
This article explains more details：
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By NAPA
ATLANTA, July 2, 2024 /
link hidden, please login to view/ -- Genuine Parts Company (NYSE: GPC), a leading global distributor of automotive and industrial replacement parts, plans to release second quarter financial results on July 23, 2024. Following the release, management will host a conference call at 8:30 a.m. ET. The public may access the webcast and supplemental earnings materials on the link hidden, please login to view. The call is also available by dialing 1-800-836-8184. A replay of the call will be available on the company's website or toll-free at 1-888-660-6345, ID 93997#, two hours after completion of the conference call. About Genuine Parts Company
Established in 1928, Genuine Parts Company is a leading global service organization specializing in the distribution of automotive and industrial replacement parts. Our Automotive Parts Group operates across the U.S., Canada, Mexico, Australasia, France, the U.K., Ireland, Germany, Poland, the Netherlands, Belgium, Spain and Portugal, while our Industrial Parts Group serves customers in the U.S., Canada, Mexico and Australasia. We keep the world moving with a vast network of over 10,700 locations spanning 17 countries supported by more than 60,000 teammates. Learn more at link hidden, please login to view.
SOURCE Genuine Parts Company
For further information: Investor contact: Timothy Walsh, (678) 934-5349, Senior Director - Investor Relations | Media contact: Heather Ross, (678) 934-5220, Vice President - Strategic Communications
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