Earnings
Genuine Parts trims top of its 2026 profit range as industrial unit outpaces auto parts
Adjusted EPS of $2.07 edged past forecasts, but NAPA's North American margins narrowed ahead of next year's split.
HedgeWeekly News Desk ·
Genuine Parts Co. posted third-quarter adjusted earnings of $2.07 a diluted share on Tuesday, up from $1.98 a year earlier and slightly above the roughly $2.05 analysts had pencilled in before the report. Sales rose 4.2% to $6.52 billion, in line with forecasts, with comparable sales up 2.9%. On a reported basis, net income was little changed at $224.4 million, or $1.62 a share, after $86.6 million of pre-tax restructuring and separation costs.
The industrial business did most of the work. Industrial sales rose 6.1% to $2.41 billion, comparable sales grew 5.5% and segment EBITDA climbed 11.2%, lifting its margin 60 basis points to 13.2%. North America Automotive, the larger unit, grew sales just 2.2% to $2.54 billion, and its segment EBITDA fell 2.9% as the margin narrowed 40 basis points to 7.6%. International Automotive sales rose 4.5% with a flat 9.0% margin.
The company narrowed its 2026 adjusted EPS forecast to $7.50 to $7.75, from $7.50 to $8.00, cutting the top of the range. It lowered its GAAP EPS outlook to $5.60 to $5.85 from $5.90 to $6.40, reflecting the charges. Sales growth guidance of 3% to 5.5% and free cash flow guidance of $550 million to $700 million were left unchanged.
Why it matters: Genuine Parts says it is on track to split into two listed companies, GPC and Motion, in the first quarter of 2027. This quarter's results show the parts of that split moving in different directions: the industrial Motion business is expanding margins while the North American auto parts unit is losing them. That mix will shape how investors value each company after the split. Separation costs have reached $54.9 million so far this year. Nine-month free cash flow of $502 million, against $160 million a year earlier, shows the company already has most of its full-year cash target in hand.