QUOTE AND NEWS
Forbes  Mar 2  Comment 
Looking at the universe of stocks we cover at Dividend Channel, on 3/4/15, Johnson Controls Inc (NYSE: JCI), Genuine Parts Co. (NYSE: GPC), and Gannett Co Inc (NYSE: GCI) will all trade ex-dividend for their respective upcoming dividends. Johnson...
Forbes  Feb 26  Comment 
The most recent short interest data has been released by the NASDAQ for the 02/13/2015 settlement date, which shows a 1,939,486 share decrease in total short interest for Genuine Parts Co. (NYSE: GPC), to 2,682,767, a decrease of 41.96% since...
Market Intelligence Center  Feb 25  Comment 
For a hedged play on Genuine Parts Co (GPC), MarketIntelligenceCenter.com’s option-trade picking algorithms recommend the May. '15 $95.00 covered call for a net debit in the $92.68 area. That is also the break-even stock price for the covered...
Market Intelligence Center  Feb 18  Comment 
After closing Tuesday at $96.61, Genuine Parts Co (GPC) presents an attractive opportunity to get a 2.58% return in just 86 days, which is an annualized return of 10.95% (for comparison purposes only). To enter this trade, sell one May. '15 $95.00...
TheStreet.com  Feb 17  Comment 
NEW YORK (TheStreet) -- Genuine Parts Co.  shares are up 0.72% to $97.71 in trading Tuesday after the auto parts manufacturer released its fourth quarter earnings results before the opening bell today. The Atlanta-based company reported fourth...
Benzinga  Feb 17  Comment 
Genuine Parts Company (NYSE: GPC) reported in-line earnings for the fourth quarter. The Atlanta, Georgia-based company posted quarterly earnings of $166 million, or $1.07 per share, compared to $150 million, or $0.97 per share, in the year-ago...
Wall Street Journal  Feb 17  Comment 
Genuine Parts Co. said its fourth-quarter earnings rose 10% on the automotive-replacement parts distributor’s broad sales growth and a boost from acquisitions.




 

Genuine Parts Company (NYSE:GPC) distributes automotive parts and industrial replacement parts (engine parts for heavy machinery) to auto repair businesses and manufacturers. The company also sells office products to large retailers. GPC operates in a mature market with many players, and the products it distributes are commodities with many substitutes available in the marketplace, resulting in ongoing pricing pressure from competitors.

DEI auto sales have also been negatively affected by the trend of longer lasting manufacturers warranties. Over the last several years longer warranties have become the industry standard on new cars; when cars are under warranty, drivers are more likely to go to the car dealership for free repairs, than to visit DEI's clients.

Company Overview

Business Financials

In 2009, GPC earned a total of $10.0 billion in total revenues. This was a significant decline from its 2008 total revenues of $11.0 billion. Unsurprisingly, this had a negative impact on GPC's net income. Between 2008 and 2009, GPC's net income declined from $475 million in 2008 to a net income of $400 million in 2009.[1]

Business Segments

Genuine Parts Co. divides its business into four segments: Automotive Parts , Industrial Machinery Parts, Office Products, and Electrical/Electronic Materials (insulating and conducting materials). Its Automotive Parts group distributes over 300,000 products to retail customers through its 58 NAPA (National Automotive Parts Association) distribution centers across the US. The Industrial Parts Group, operating under the name Motion Industries, provides customized product and technical expertise to the manufacturing industry. The Office Products group distributes over 30,000 business products from 44 distribution centers across the U.S. and Canada under the name S.P. Richards Company. The Electrical/Electronic Materials Group was formed in 1998 through the acquisition of EIS, the nation's largest distributor of electronic and electrical apparatus. The group distributes over 100,000 items from 33 locations across the U.S. and Mexico.

Trends and Forces

Longer manufacturer warranties mean less business for DEI's clients

Longer manufacturer warranties have become the industry standard in recent years. These warranties, which offer free repairs, motivate car owners to do repairs at the dealership rather than through NAPA stores for the first few years of ownership. This in turn hurts GPC's business, as the repairs are offered for free.

Outsourcing of manufacturing erodes client base

Increased outsourcing of North American manufacturing will hurt GPC's bottom line as its subsidiaries lie entirely in the US, Canada and Mexico. A study conducted by "PERI" of the Univ. of Massachusetts found that "foreign sourced goods in total manufacture inputs, a significant indicator of the extent of outsourcing activity, rose from 12.4% to 22.1% in the manufacturing sector as a whole.

Competitors

As a conglomerate, GPC encounters different competitive pressures in the respective industries in which its subsidiaries operate. GPC's business structure allows it to leverage its core competencies as a distributor across its business interests. This also leads to cost savings in the sharing of back office and HR facilities.

  • Automotive Parts Distribution, these companies compete with Genuine Parts for individual car owners:
  1. Automobile Manufacturers and Car Dealerships
  2. AutoZone (AZO)
  3. Advance Auto Parts (AAP)
  • Industrial Parts Distribution, these companies compete with Genuine Parts for heavy machinery part distribution:
  1. Applied Information Tech.
  2. General Motors (GM)
  • Office Supplies, these companies compete with Genuine Parts for distrubition of office supplies to American businesses:
  1. Officemax (OMX)
  2. Office Depot (ODP)
  3. Staples (SPLS)
  • Electronic Supplies, these companies compete with Genuine Parts for distribution of Electronic components:
  1. Micron Technology (MU)
  2. Atmel (ATML)
  3. Advanced Micro Devices (AMD)

Footnotes

  1. GPC 10-K 2009 Item 6 Pg. 13
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