Shares of automotive and industrial replacement parts distributor Genuine Parts Company (NYSE:GPC) are under pressure today after its fourth-quarter results disappointed investors. Additionally, GPC is undertaking a global restructuring drive to improve efficiency.
GPC’s fourth-quarter revenue increased by 1.1% year-over-year to $5.6 billion due to gains from acquisitions and favorable foreign currency movement. However, the figure lagged expectations by about $40 million. Its EPS of $2.26, on the other hand, fared better than estimates by $0.06. During the quarter, comparable sales in GPC’s Automotive segment decreased by 2.7%. In contrast, comparable sales in its Industrial segment improved by 1.2%.
Amid a challenging macro environment, GPC is undertaking global restructuring efforts to drive efficiency gains. This includes a voluntary retirement offer in its U.S. operations alongside optimization of some of its distribution centers, stores, and other facilities. The effort is expected to cost the firm $100 million to $200 million.
Is GPC a Good Dividend Stock?
For Fiscal year 2024, GPC anticipates sales growth in the range of 3% to 5%. Adjusted EPS for the year is expected to be in the range of $9.70 to $9.90. Further, the company is increasing its quarterly dividend by 5% to $1 per share. The GPC dividend is payable on April 1 to investors of record on March 1. Impressively, this is the 68th consecutive year the dividend has been boosted by GPC.
Shares of the company have declined by nearly 21% over the past year. Truist’s Scot Ciccarelli, the sole analyst tracking GPC, has reiterated a Buy rating on the stock. Ciccarelli’s price target of $155 implies a modest 10.8% potential upside in GPC stock.
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