NEW YORK (TheStreet) -- Genuine Parts
(GPC - Get Report) posted first quarter revenue of $3.62 billion, up 13.3% from the same period in 2013, and in-line with analysts consensus estimate of $3.61 billion.
Year over year quarterly net income rose 9% to $157.5 million, or $1.02 per diluted share, in-line with analysts estimates.
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However, despite the positive earnings report shares of Genuine Parts are down -1.6% to $86.54.
TheStreet Ratings team rates GENUINE PARTS CO as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate GENUINE PARTS CO (GPC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- GPC's revenue growth has slightly outpaced the industry average of 11.0%. Since the same quarter one year prior, revenues rose by 12.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- GPC's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that GPC's debt-to-equity ratio is low, the quick ratio, which is currently 0.58, displays a potential problem in covering short-term cash needs.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- GENUINE PARTS CO's earnings per share declined by 5.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GENUINE PARTS CO increased its bottom line by earning $4.41 versus $4.15 in the prior year. This year, the market expects an improvement in earnings ($4.57 versus $4.41).
- Net operating cash flow has significantly increased by 54.81% to $219.25 million when compared to the same quarter last year. Despite an increase in cash flow, GENUINE PARTS CO's average is still marginally south of the industry average growth rate of 63.05%.
- You can view the full analysis from the report here: GPC Ratings Report