Genuine Parts Company announced today first quarter sales and earnings for the quarter ended March 31, 2017, and also announced an acquisition for its U.S. Automotive Parts Group.
The company entered into a definitive agreement to acquire Merle's Automotive Supply, with an effective close date of May 1, 2017. Merle's, founded in 1969 and based in Tucson, Ariz., is a 14-location automotive parts distributor serving the commercial and retail markets in the greater Tucson and southern Arizona area. The addition of Merle's is expected to generate approximate annual revenues of $45 million.
General Parts Company’s sales for the first quarter ended March 31, 2017 were $3.91 billion, a 5% increase compared to $3.72 billion for the same period in 2016. Net income for the first quarter was $160.2 million compared to $158.0 million recorded for the same period in the previous year. Earnings per share on a diluted basis were $1.08, up 3% from $1.05 for the first quarter last year.
Paul Donahue, President and Chief Executive Officer, said, "We are pleased that our total sales increase in the first quarter of 2017 represents positive sequential sales improvement and is our strongest quarterly growth since the fourth quarter of 2014. As a diversified global distributor, we benefited from strong total sales growth in our international automotive, industrial, electrical and office operations. The strength in these areas was partially offset by the headwinds in our U.S. automotive business, which we are working to overcome."
First quarter sales for the Automotive Group were up 3%, including an approximate 0.5% comparable sales increase. Sales at Motion Industries, our Industrial Group, were up 7%, including a 3% comparable sales increase, and sales at EIS, our Electrical/Electronic Group, were up 5%, with comparable sales up 2.5%. Sales for S.P. Richards, our Office Products Group, were up 9% for the quarter, including a 2.5% decrease in comparable sales.
"It is encouraging that our overall growth was driven by sales increases across all four of our businesses, with positive comparable sales in all but one segment,” Donahue said. “Our teams have worked hard to position the company for stronger growth and remain focused on key sales and cost initiatives to build on our first quarter performance as we move forward in the year. We are excited by the future growth prospects across our broad platform, and will continue to support this growth with a strong balance sheet, solid cash flows and effective capital allocation intended to maximize shareholder value."
The company expects sales to be up 3% to 4% for the full year, which is unchanged from the initial guidance, and is raising its outlook for diluted earnings per share to $4.75 to $4.85 compared to the initial outlook of $4.70 to $4.80.
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