Genuine Parts Co.'s (GPC) second-quarter profit slid a
less-than-expected 22% as its auto-parts business held up and the
company's industrial operations continued to slump.
The operator of NAPA parts stores has been cutting costs as
industrial-production declines more than offset the gains many
makers and distributors of replacement auto parts have seen as
cash-strapped consumers put off buying new vehicles in favor of
patching up old ones.
Chairman and Chief Executive Thomas C. Gallagher said the latest
results "reflect the realities of a difficult economy" and added
the second half of the year would see the company supporting growth
initiatives and cost-reduction efforts.
Genuine Parts posted earnings of $103.6 million, or 65 cents a
share, down from $133.1 million, or 81 cents a share, a year
earlier. Net sales dropped 12% to $2.54 billion.
Analysts surveyed by Thomson Reuters expected earnings of 62
cents a share on revenue of $2.57 billion.
Gross margin ticked down to 29.4% from 29.7%.
The company's automotive unit eked out a 2% profit rise, though
sales fell 4.8%. But profit in the industrial segment tumbled 59%
on a 22% sales drop.
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.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com