Genuine Parts Company reported its sales and earnings for the second quarter and six months ended June 30, 2014.
Thomas C. Gallagher, Chairman and Chief Executive Officer, announced July 21 that record sales totaling $3.9 billion were up 6% compared to the second quarter of 2013. Net income for the quarter was $197.7 million compared to $216.4 million recorded in the same period of the previous year.
Earnings per share on a diluted basis were $1.28 compared to $1.39 for the second quarter last year. Before the one-time adjustment in 2013 described below, second quarter net income of $197.7 million and earnings per share on a diluted basis of $1.28 were both up 9% compared to the same period in 2013.
In association with the April 1, 2013 acquisition of the remaining 70% interest in GPC Asia Pacific, the company's initial 30% investment was remeasured and, net of certain one-time purchase accounting costs, amounted to a pre-tax income adjustment of approximately $36 million recorded in the second quarter of 2013. This adjustment, combined with the lower tax rate for the remeasurement, favorably impacted diluted earnings per share in the second quarter of 2013 by $0.22.
For the six months ended June 30, 2014, sales totaled $7.5 billion, up 10% compared to the same period in 2013. Net income for the six months was $355.2 million compared to $360.7 million recorded in the previous year. Earnings per share on a diluted basis were $2.30 compared to $2.31 for the same period last year.
Before the one-time adjustment in 2013, net income for the six months of $355.2 million was up 9% compared to the previous year. Earnings per share on a diluted basis of $2.30 were up 10% compared to the same period in 2013 excluding the adjustment.
"We are pleased to report record sales as well as a solid 9% comparative earnings increase,” Gallagher said. “Our 6% total sales increase includes 5% underlying sales growth and a 2.5% contribution from acquisitions offset by a currency headwind of approximately 1%. Our progress in the quarter was also supported by sales growth in all four of our business segments, with sales for the Automotive Group up 5% including 7% underlying growth offset by a 2% currency headwind. Sales at Motion Industries, our Industrial Group, were up 7% including 4% underlying growth and 3% from acquisitions. Sales at EIS, our Electrical/Electronic Group, increased by 32% due to acquisitions. Sales for S. P. Richards, our Office Products Group, were up 4% and includes 2% underlying growth along with 2% from acquisitions."
Gallagher concluded, "In the second quarter, we again achieved our core objectives of growing sales and earnings, producing operating margin improvement, generating solid cash flows while maintaining a strong balance sheet. We are both proud of and encouraged by this accomplishment and, looking ahead, we enter the second half of 2014 poised to demonstrate ongoing progress in driving improved results. We remain optimistic about our prospects for growth in each of our four businesses."
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