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Genuine Parts (GPC) Q3 Earnings: Is a Beat in the Cards?

Zacks Equity Research
Updated

Genuine Parts Company GPC will release its third-quarter fiscal 2017 results on Oct 19, before the market opens.

Genuine Parts reported earnings of $1.29 per share in second-quarter fiscal 2017, missing the Zacks Consensus Estimate by 1.5%. Revenues in the reported quarter increased 5% year over year and set a record of $4.1 billion. The figure surpassed the Zacks Consensus Estimate of $4 billion.
 
Over the past three months, shares of the company have outperformed the industry it belongs to. The company’s shares increased 15.7% compared with the industry’s growth of 10.9%.

Let’s see how things are shaping up for this announcement.

Genuine Parts Company Price and EPS Surprise

Genuine Parts Company Price and EPS Surprise | Genuine Parts Company Quote

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A Likely Positive Surprise?

According to our quantitative model, chances of Genuine Parts beating the Zacks Consensus Estimate in the third quarter are high. This is because it has the right combination of the two key ingredients – positive Earnings ESP and a Zacks Rank #3 (Hold) or better, which is required to increase the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks ESP: Earnings ESP for Genuine Parts is currently +0.98%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.29 and $1.28 respectively. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Genuine Parts carries a Zacks Rank of 3. This when combined with a positive ESP makes us reasonably confident of a earnings beat.

Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

What’s Driving the Better-than-Expected Earnings?

Genuine Parts has undertaken various initiatives to boost sales and earnings, such as product-line expansion, penetration into new markets and cost-saving initiatives. The company relies on a diverse product portfolio for top and bottom-line growth.

For 2017, Genuine Parts continues to expect full-year revenues to increase 3-4%. Earnings per share in 2017 are expected to be in the $4.75–$4.85 range, on par with the previous expectation.

The Zacks Consensus Estimate for net sales of the automotive segment (automotive segment accounted for 52.8% of total sales in second-quarter 2017) for the third-quarter 2017 is currently pegged at $2.16 billion. The second-quarter actual figure for the automotive segment net sales was also $2.16 billion.

The Zacks Consensus Estimate for net sales of the office products segment (automotive segment accounted for 12.3% of total sales in second-quarter 2017) for the third-quarter 2017 is currently pegged at $519 million. The second-quarter actual figure for the office products segment net sales was also $504 million.

Stocks to Consider

Here are a few other stocks in the auto industry you may consider as our model shows that they have the right combination of elements to post an earnings beat this quarter.

Autoliv, Inc. ALV has an earnings ESP of +1.18% and carries a Zacks Rank #2 (Buy). The company will report third-quarter 2017 financial results on Oct 26. You can see the complete list of today’s Zacks #1 Rank stocks (Strong Buy) here.

Horizon Global Corporation HZN has an earnings ESP of +5.82% and carries a Zacks Rank #3. The company’s third-quarter 2017 financial results are expected to release on Nov 7.

Magna International Inc. MGA has an earnings ESP of +0.32% and carries a Zacks Rank #2. The company’s third-quarter 2017 financial results are expected to release on Nov 9.

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Autoliv, Inc. (ALV) : Free Stock Analysis Report
 
Magna International, Inc. (MGA) : Free Stock Analysis Report
 
Horizon Global Corporation (HZN) : Free Stock Analysis Report
 
Genuine Parts Company (GPC) : Free Stock Analysis Report
 
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