Genuine Parts Company Reports Mixed Q3 Results Amid Strategic Developments and Market Conditions

Genuine Parts Company (GPC) reported its financial results for the third quarter and the nine months ended September 30, 2024, reflecting a mixed performance amid strategic developments and market conditions.

For the third quarter of 2024, GPC achieved net sales of $5,970.2 million, marking a 2.5% increase from $5,824.6 million in the same period of 2023. The growth was supported by a 3.2% contribution from acquisitions, although comparable sales experienced a slight decline of 0.8%. Gross profit for the quarter rose to $2,198.4 million, representing 36.8% of sales, compared to 36.2% in the prior year. However, net income fell significantly to $226.6 million, a decrease of 35.5% from $351.2 million in Q3 2023, leading to diluted earnings per share of $1.62, down from $2.49.

For the nine months ended September 30, 2024, net sales totaled $17,716.4 million, an increase of 1.2% from $17,504.7 million in the same period of 2023. Gross profit for this period was $6,453.4 million, or 36.4% of sales, up from 35.7% in the previous year. However, net income decreased to $771.0 million, down 22.9% from $999.6 million in 2023, with diluted earnings per share at $5.51, compared to $7.08.

The company’s operating expenses increased significantly, with selling, administrative, and other expenses for Q3 2024 rising to $1,722.4 million, up from $1,551.8 million in Q3 2023. This increase was attributed to inflationary pressures and costs associated with the global restructuring initiative, which incurred $41 million in Q3 and $161 million over the nine months. The restructuring aims to enhance operational efficiency and is expected to be substantially completed by the end of 2025.

GPC's strategic acquisitions during the nine months totaled approximately $1.1 billion, significantly higher than $230 million in the same period last year. Notable acquisitions included Motor Parts and Equipment Corporation and Walker Automotive Supply, contributing to a rise in inventory by 18.2% and accounts payable by 10.9%.

The company also announced the termination of its frozen U.S. qualified defined benefit pension plan, effective September 30, 2024, anticipating a non-cash pension settlement charge of approximately $620 million in 2025.

As of September 30, 2024, GPC's total assets increased to $20,259.2 million, up from $17,968.5 million at the end of 2023, while total liabilities rose to $9,123.4 million from $7,827.1 million. The company maintained a strong liquidity position with $1.1 billion in cash and cash equivalents and $1.5 billion available on its revolving credit facility.