Genuine Parts Company GPC reported first-quarter 2026 adjusted earnings of $1.77 per share, which missed the Zacks Consensus Estimate of $1.81 by 1.94%. The bottom line improved 1.1% from the year-ago quarter’s adjusted earnings of $1.75 per share.
The company posted revenues of $6.27 billion, which beat the Zacks Consensus Estimate of $6.17 billion by 1.5% and increased 6.8% year over year. The performance was driven by solid sales growth across business segments and a 20-basis-point improvement in gross margin to 37.3%.
Genuine Parts Company Price, Consensus and EPS Surprise
Genuine Parts Company price-consensus-eps-surprise-chart | Genuine Parts Company Quote
GPC Segment Sales Show Broad-Based Growth
North America Automotive sales rose 4.3% year over year to $2.36 billion. The increase reflected a 2.2% gain in comparable sales, a 1.6% benefit from acquisitions and a net 0.5% favorable impact of foreign currency and other. Segment EBITDA increased 6.3% to $156 million, while segment EBITDA margin improved 10 basis points to 6.6%.
International Automotive delivered the strongest top-line growth, with sales up 13.2% to $1.59 billion. This included a 0.3% increase in comparable sales, a 2.3% lift from acquisitions and a 10.6% favorable impact from foreign currency. Segment EBITDA improved 4.6% to $145 million, but segment EBITDA margin declined 80 basis points to 9.1%.
Industrial sales increased 5.2% to $2.32 billion, supported by a 3.9% rise in comparable sales, a 0.3% contribution from acquisitions and a 1.0% favorable foreign currency impact. Segment EBITDA climbed 12.7% to $314 million, and segment EBITDA margin expanded 90 basis points to 13.6%.
Genuine Parts Absorbs Restructuring and Separation Costs
On a GAAP basis, net income for the first quarter of 2026 was $189 million, or $1.37 per diluted share, compared with $194 million, or $1.40 per diluted share, in the year-ago period. The difference between GAAP and adjusted results primarily reflects costs tied to the company’s global restructuring initiative and separation planning.
Adjusted net income was $245 million compared with $243 million in the prior-year quarter.
GPC will split Global Automotive and Global Industrial into two independent, publicly traded companies, targeted for completion in the first quarter of 2027.
An incremental run-rate cost impact of $100-$150 million is expected, driven by standalone costs and dis-synergies. Dis-synergies are estimated to be in the band of $50-$75 million, split roughly evenly between Automotive and Industrial, while standalone costs of $50 million to $75 million are expected to fall largely within Industrial.
GPC Reaffirms 2026 Outlook and Capital Plans
GPC reaffirmed its full-year 2026 outlook, continuing to expect total sales growth of 3% to 5.5% and comparable sales growth of 2% to 4.5%. On the profitability front, the company maintained its view of 40 to 60 basis points of adjusted gross margin expansion and 30 to 50 basis points of adjusted SG&A leverage. It also reiterated its diluted EPS guidance of $6.10 to $6.60 and adjusted diluted EPS guidance of $7.50 to $8.00.
Cash flow expectations remained unchanged, with operating cash flow projected in the band of $1.0-$1.2 billion and free cash flow expected in the $550-$700 million range. For the first three months of 2026, operating cash flow totaled $64 million, while free cash flow was negative $34 million, reflecting continued investment and seasonally lower first-quarter cash generation.
Balance sheet discipline and capital allocation remained in focus. Total liquidity was $1.3 billion as of March 31, 2026, including $500 million in cash and $838 million of revolver capacity. During the quarter, GPC invested $98 million in capex and $14 million in acquisitions, while returning $142 million to shareholders via dividends. For 2026, the company targets $450-$500 million in capex and $300-$350 million in M&A, with approximately 7.5 million shares remaining under its repurchase authorization.
GPC stock currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Peer Releases
LKQ Corporation LKQ is slated to release first-quarter 2026 results on April 30.The Zacks Consensus Estimate for LKQ’s earnings and revenues is pegged at 67 cents and $3.42 billion, respectively. LKQ surpassed earnings estimates in one of the trailing four quarters, missed twice and matched in the other, with the average negative surprise being 0.54%. The company has a Zacks Rank #4 at present.
Dorman Products, Inc. DORM is slated to release first-quarter 2026 results on May 4. The Zacks Consensus Estimate for Dorman’s earnings and revenues is pegged at $1.59 per share and $522.99 million, respectively. DORM surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 16.97%. The company has a Zacks Rank #4 at present.
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This article originally published on Zacks Investment Research (zacks.com).