Genuine Parts Company, the Atlanta distributor of automotive and other parts, saw its sales rise and predicted continued growth, even as its CEO questioned the impact of rising gas prices and other pressures.
In February and March, the company saw a decrease in demand for discretionary items, Genuine Parts chairman, president and CEO Thomas Gallagher said Friday in the company's first-quarter conference call. While Gallagher said because the company tilts toward wholesale sales and not retail, Genuine Parts might see a smaller impact from changing consumer behavior.
"As far as the impact of fuel pricing, we haven't seen it materially yet, but that's not to say that we might not," Gallagher said. "We have seen discretionary spending tighten up a little bit in the automotive business and we think that there may be some further tightening that might come."
Genuine Parts vice chairman and chief financial officer Jerry Nix said the company's customers are pushing back on cost increases, including the price of products, and the company is in turn pushing back on suppliers. Nix said, though, that customers are pushing back better than Genuine Parts is, calling it a concern of the company, but one he thinks it can address.
The company raised its expected revenues for 2011 to 9 to 11 percent, from the 6 to 8 percent it had predicted earlier, and said 2011 earnings per share should be 10 cents higher than the $3.22-to-$3.32 originally predicted.
For the first quarter, Genuine Parts had record sales of $3 billion, a 14 percent increase from the first quarter of 2010. Its profits were $126.5 million, a 26 percent increase from profits of $100.6 million in the first quarter of 2010. Earnings per share of 80 cents were 27 percent higher than the like period a year ago, when they were 63 cents a share.
About the Author
