Genuine Parts Company is seeing positive momentum, but is worried about the possible effects of rising gas prices on its automotive and other businesses.
"It could impact consumer spending" and might mean sales would decrease in the company's industrial and electrical businesses, Genuine Parts chairman and CEO Tom Gallagher said in a company conference call Tuesday.
Still, the Atlanta based company saw positive results for the fourth quarter in three of its four businesses, with sales increasing in automotive, industrial and electrical businesses and decreasing in office products. For the year, all four businesses were positive.
Gallagher said he expects office products to remain sluggish as overall demand has softened, though the industrial and electrical businesses have been solid.
In the automotive business, the average number of retail transactions were down, though the amount that shoppers spent was up. Because the average age of vehicles on the road is more than 10 years old and most cars are out of warranty, Gallagher said, he expects good growth in the automotive business in the coming years.
He said, though, that Genuine Parts is not selling as many discretionary related items to drivers who come in for repairs as it would be in an improving economy. People have been "moving down the value chain," he said, particularly in the automotive category.
In the company's commercial automotive business, average ticket and average transaction were both up.
Genuine Parts made $135 million in the fourth quarter, a 13.7 percent increase over the $118.7 million it made in the same quarter a year ago. For the year, Genuine Parts made $565.1 million, a 18.8 percent increase over the $475.5 million it made in 2010.
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