Genuine Parts Company (GPC, Financial) filed Quarterly Report for the period ended 2010-09-30.
Genuine Parts Company has a market cap of $7.48 billion; its shares were traded at around $47.63 with a P/E ratio of 16.5 and P/S ratio of 0.7. The dividend yield of Genuine Parts Company stocks is 3.5%. Genuine Parts Company had an annual average earning growth of 6.1% over the past 10 years.GPC is in the portfolios of Mario Gabelli of GAMCO Investors, Brian Rogers of T Rowe Price Equity Income Fund, Tweedy Browne of Tweedy Browne CO LLC, John Buckingham of Al Frank Asset Management, Inc., Pioneer Investments, Jeremy Grantham of GMO LLC, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors, Richard Aster Jr of Meridian Fund, Bill Frels of Mairs & Power Inc. , Murray Stahl of Horizon Asset Management, Dodge & Cox, James Barrow of Barrow, Hanley, Mewhinney & Strauss, Manning & Napier Advisors, Inc.
Cost of goods sold for the third quarter of 2010 was $2.10 billion, a 14% increase from $1.84 billion for the third quarter of 2009. As a percent of sales, cost of goods sold increased to 71.1% for the three months ended September 30, 2010 from 70.6% for the same period in 2009. For the nine month period ended September 30, 2010, cost of goods sold was $5.96 billion, a 12% increase from $5.34 billion for the same period last year, and as a percent of sales increased to 71.0% compared to 70.4%. The increase in cost of goods sold as a percent of sales for the three and nine month periods ended September 30, 2010 over the same periods in 2009 reflects the pricing adjustments implemented in the Automotive segment during the period April to September of 2009, in order to remain competitive in the marketplace. Competitive pricing pressures in the Office Products segment have also impacted cost of goods sold. For the nine month period ended September 30, 2010, cumulative pricing increased 3.6% in the Electrical Group, 2.1% in the Industrial Group, 0.4% in the Automotive Group and .3% in the Office Group.
Operating expenses of $640.5 million decreased to 21.7% of sales for the third quarter of 2010, as compared to 22.8% for the same period of the prior year. For the nine months ended September 30, 2010, these expenses totaled $1.86 billion, or 22.2% of sales, an improvement from 23.2% for the same period in 2009. The decrease in expenses as a percent of sales for both the third quarter and nine months ended September 30, 2010 is due to our cost savings initiatives and the benefit of greater leverage associated with our sales growth for the three and nine month periods ended September 30, 2010.
The Automotive Parts Groups operating profit increased 15% in the third quarter of 2010 and its operating profit margin increased to 8.4% for the three months ended September 30, 2010, as compared to 7.8% in the same period of the prior year. For the nine months ended September 30, 2010, operating profit increased 8% as compared to the same nine month period of 2009, and operating profit margin increased to 8.0%, as compared to 7.9% for the same period last year. For the three and nine month periods ended September 30, 2010, operating profit margins for this group improved due to cost savings and improved expense leverage on increased revenues. The Industrial Products Group had a 100% increase in operating profit in the third quarter of 2010 compared to the third quarter of 2009, and the operating profit margin for this group increased to 7.9% as compared to 5.1% in the same period of the previous year. Operating profit increased by 78% for the nine month period ended September 30, 2010 compared to the same period in 2009, and the operating profit margin improved to 7.0%, as compared to 4.8% for the same period in 2009. The improved operating profit margins for this group are due to the combination of increased volume incentives, cost savings and greater expense leverage on sales growth, which contributed to the increase in operating profit for the three and nine month periods ended September 30, 2010. For the three month period ended September 30, 2010, the Office Products Groups operating profit was flat and its operating profit margin remained unchanged at 6.1%. For the nine months ended September 30, 2010, operating profit decreased 6% compared to the same period in 2009, and operating profit margin decreased to 7.5%, as compared to 7.9% for the nine months ended September 30, 2009. The decrease in operating results relates to soft market conditions and the resulting sales declines for this group. The Electrical/Electronic Materials Group increased its operating profit by 23% in the third quarter, and its operating profit margin decreased to 7.2% as compared to 7.6% in the third quarter of the previous year. Operating profit increased by 26% for the nine months ended September 30, 2010, and its operating profit margin decreased to 6.8% from 6.9% for the same period of 2009. The improvement in operating profit for this group is primarily due to cost savings and improved expense leverage on increased revenues for the three and nine month periods ended September 30, 2010. The decrease in operating profit margin reflects the downward pressure on margins from increased copper pricing.
Net income for the three months ended September 30, 2010 was $131.8 million, an increase of 22% as compared to $107.6 million for the same three month period of 2009. On a per share diluted basis, net income was $.83, an increase of 24% as compared to $.67 for the third quarter of last year. Net income for the nine months ended September 30, 2010 was $356.9 million, an increase of 19% from $300.4 million recorded for the same period of the previous year. Earnings per share on a diluted basis for the nine months ended September 30, 2010 were $2.25, up 20% as compared to $1.88 for the same nine month period in 2009.
Accounts receivable increased $207.8 million or 17% from December 31, 2009, which is due to the Companys overall sales increase and acquisitions. Inventory decreased $31.7 million or 1% compared to December 31, 2009, which reflects the benefits of the Companys inventory management initiatives. Goodwill and other intangible assets increased $35.7 million or 21% from December 31, 2009, primarily due to three acquisitions in the nine month period ended September 30, 2010. Other assets increased $37.0 million or 25% from December 31, 2009. Accounts payable increased $277.4 million or 25% from December 31, 2009. This change is due to increased inventory purchases related to the sales increase for the first nine months of 2010, as well as more favorable terms negotiated with our vendors and other payables initiatives such as a procurement card program. The Companys long-term debt is discussed in detail below.
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Genuine Parts Company has a market cap of $7.48 billion; its shares were traded at around $47.63 with a P/E ratio of 16.5 and P/S ratio of 0.7. The dividend yield of Genuine Parts Company stocks is 3.5%. Genuine Parts Company had an annual average earning growth of 6.1% over the past 10 years.GPC is in the portfolios of Mario Gabelli of GAMCO Investors, Brian Rogers of T Rowe Price Equity Income Fund, Tweedy Browne of Tweedy Browne CO LLC, John Buckingham of Al Frank Asset Management, Inc., Pioneer Investments, Jeremy Grantham of GMO LLC, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors, Richard Aster Jr of Meridian Fund, Bill Frels of Mairs & Power Inc. , Murray Stahl of Horizon Asset Management, Dodge & Cox, James Barrow of Barrow, Hanley, Mewhinney & Strauss, Manning & Napier Advisors, Inc.
Highlight of Business Operations:
Sales for the Automotive Parts Group increased 7% in the three and nine month periods ended September 30, 2010, as compared to the same periods in the previous year. Currency exchange had a positive impact on the Automotive Parts Groups results in Canada and Mexico, which contributed approximately 1% and 2% to sales for the three and nine month periods ended September 30, 2010, respectively. In addition, acquisitions in the Automotive Parts Group added approximately 1% to sales for the nine months ended September 30, 2010. We expect continued sales growth in this business over the remainder of the year as we continue to focus on our various sales initiatives. The Industrial Products Groups sales increased by 29% and 21% for the three and nine month periods ended September 30, 2010, respectively, as compared to the same periods in 2009. Several factors contributed to the increase in sales volumes for this group, including the positive impact of their internal sales initiatives. In addition, acquisitions contributed approximately 6% for the three and nine month periods ended September 30, 2010. Industrial market indices, such as Industrial Production and Capacity Utilization, also trended positive over the first nine months of 2010, indicating the ongoing improvement in the manufacturing sector of the economy served by the group. Sales for the Office Products Group were down slightly for the three months and decreased 1% for the nine months ended September 30, 2010, as compared to the same periods in 2009. The declining sales trends appear to have stabilized for this group, although the Office Group continues to experience soft market conditions. Sales for the Electrical/Electronic Materials Group increased 31% and 27% for the three and nine month periods ended September 30, 2010, respectively, as compared to the same periods of the previous year. The benefit of internal sales initiatives and escalating copper pricing, which added approximately 3% and 5% to sales for the three and nine month periods ended September 30, 2010, respectively, contributed to the groups sales increase over the same periods in 2009. In addition, acquisitions contributed approximately 9% and 5% to sales for the three and nine month periods ended September 30, 2010, respectively. The continued improvement in the industrial markets served by this group, as measured by the Purchasing Managers Index, also had a significant positive impact on this business during the third quarter and nine months ended September 30, 2010.Cost of goods sold for the third quarter of 2010 was $2.10 billion, a 14% increase from $1.84 billion for the third quarter of 2009. As a percent of sales, cost of goods sold increased to 71.1% for the three months ended September 30, 2010 from 70.6% for the same period in 2009. For the nine month period ended September 30, 2010, cost of goods sold was $5.96 billion, a 12% increase from $5.34 billion for the same period last year, and as a percent of sales increased to 71.0% compared to 70.4%. The increase in cost of goods sold as a percent of sales for the three and nine month periods ended September 30, 2010 over the same periods in 2009 reflects the pricing adjustments implemented in the Automotive segment during the period April to September of 2009, in order to remain competitive in the marketplace. Competitive pricing pressures in the Office Products segment have also impacted cost of goods sold. For the nine month period ended September 30, 2010, cumulative pricing increased 3.6% in the Electrical Group, 2.1% in the Industrial Group, 0.4% in the Automotive Group and .3% in the Office Group.
Operating expenses of $640.5 million decreased to 21.7% of sales for the third quarter of 2010, as compared to 22.8% for the same period of the prior year. For the nine months ended September 30, 2010, these expenses totaled $1.86 billion, or 22.2% of sales, an improvement from 23.2% for the same period in 2009. The decrease in expenses as a percent of sales for both the third quarter and nine months ended September 30, 2010 is due to our cost savings initiatives and the benefit of greater leverage associated with our sales growth for the three and nine month periods ended September 30, 2010.
The Automotive Parts Groups operating profit increased 15% in the third quarter of 2010 and its operating profit margin increased to 8.4% for the three months ended September 30, 2010, as compared to 7.8% in the same period of the prior year. For the nine months ended September 30, 2010, operating profit increased 8% as compared to the same nine month period of 2009, and operating profit margin increased to 8.0%, as compared to 7.9% for the same period last year. For the three and nine month periods ended September 30, 2010, operating profit margins for this group improved due to cost savings and improved expense leverage on increased revenues. The Industrial Products Group had a 100% increase in operating profit in the third quarter of 2010 compared to the third quarter of 2009, and the operating profit margin for this group increased to 7.9% as compared to 5.1% in the same period of the previous year. Operating profit increased by 78% for the nine month period ended September 30, 2010 compared to the same period in 2009, and the operating profit margin improved to 7.0%, as compared to 4.8% for the same period in 2009. The improved operating profit margins for this group are due to the combination of increased volume incentives, cost savings and greater expense leverage on sales growth, which contributed to the increase in operating profit for the three and nine month periods ended September 30, 2010. For the three month period ended September 30, 2010, the Office Products Groups operating profit was flat and its operating profit margin remained unchanged at 6.1%. For the nine months ended September 30, 2010, operating profit decreased 6% compared to the same period in 2009, and operating profit margin decreased to 7.5%, as compared to 7.9% for the nine months ended September 30, 2009. The decrease in operating results relates to soft market conditions and the resulting sales declines for this group. The Electrical/Electronic Materials Group increased its operating profit by 23% in the third quarter, and its operating profit margin decreased to 7.2% as compared to 7.6% in the third quarter of the previous year. Operating profit increased by 26% for the nine months ended September 30, 2010, and its operating profit margin decreased to 6.8% from 6.9% for the same period of 2009. The improvement in operating profit for this group is primarily due to cost savings and improved expense leverage on increased revenues for the three and nine month periods ended September 30, 2010. The decrease in operating profit margin reflects the downward pressure on margins from increased copper pricing.
Net income for the three months ended September 30, 2010 was $131.8 million, an increase of 22% as compared to $107.6 million for the same three month period of 2009. On a per share diluted basis, net income was $.83, an increase of 24% as compared to $.67 for the third quarter of last year. Net income for the nine months ended September 30, 2010 was $356.9 million, an increase of 19% from $300.4 million recorded for the same period of the previous year. Earnings per share on a diluted basis for the nine months ended September 30, 2010 were $2.25, up 20% as compared to $1.88 for the same nine month period in 2009.
Accounts receivable increased $207.8 million or 17% from December 31, 2009, which is due to the Companys overall sales increase and acquisitions. Inventory decreased $31.7 million or 1% compared to December 31, 2009, which reflects the benefits of the Companys inventory management initiatives. Goodwill and other intangible assets increased $35.7 million or 21% from December 31, 2009, primarily due to three acquisitions in the nine month period ended September 30, 2010. Other assets increased $37.0 million or 25% from December 31, 2009. Accounts payable increased $277.4 million or 25% from December 31, 2009. This change is due to increased inventory purchases related to the sales increase for the first nine months of 2010, as well as more favorable terms negotiated with our vendors and other payables initiatives such as a procurement card program. The Companys long-term debt is discussed in detail below.
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