"Genuine Parts Shares Plunge Over 9% as Q3 Earnings Fall Short and Guidance is Lowered"

ATLANTA - Shares of automotive and industrial parts distributor Genuine Parts Company (NYSE:GPC) fell 9.5% in pre-market trading on Tuesday after the company reported third-quarter earnings that missed expectations and significantly lowered its year-end outlook. The company posted adjusted earnings per share of $1.88 for the third quarter, falling well below the analyst estimate of $2.42. Revenue came in at $6 billion, slightly above the forecast of $5.95 billion, marking a 2.5% year-over-year increase.

Genuine Parts reduced its adjusted earnings guidance for 2024 to a range of $8.00 to $8.20 per share, a sharp drop from the previous range of $9.30 to $9.50, and significantly below the consensus estimate of $9.36. The company now expects only 1-2% revenue growth for the year, compared to the prior forecast range of 1-3%.

CEO Will Stengel commented, "Our results fell short of expectations, primarily due to ongoing weakness in market conditions in Europe and in our Industrial business." The company’s Automotive segment sales rose 4.8% to $3.8 billion, though profit margins contracted by 200 basis points to 6.9%. The Industrial segment saw sales decrease by 1.2% to $2.2 billion, with profit margins declining by 100 basis points to 11.9%.

To cope with the challenging environment, Genuine Parts is implementing a global restructuring initiative, including a voluntary retirement offer in the U.S. and optimization of its distribution network.