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Genuine Parts Co posted profit that dropped 2.6% in its last quarter of the year due to challenging economic factors and adverse rates in currency exchange that hit the distributor of automotive replacement parts top line.
Revenue for the quarter was worse than expectations on Wall Street, forcing shares down 1.6% in trading Tuesday before the opening bell.
The operator, based in Atlanta, of NAPA Auto Parts began as just an independent garage but has now grown through different acquisitions of companies in the industrial and automotive industries.
Over this past summer, Genuine Parts acquired an automotive company in Australia to make its presence their bigger. Outside the United States, the company does some business in Mexico and Canada.
With close to a fifth of Genuine’s sales generated outside the U.S., the company has been hit by a strong U.S. dollar which makes the products it sells more expensive outside the U.S. and lowers revenue once it is repatriated.
In the most recent period, the U.S. dollar cut about 3% of the company’s top line and hit earnings by as much as 3 cents per share.
Tom Gallagher the CEO at Genuine said that when the company enters its final quarter of the year, they anticipated a challenging sales period. That said, he added, the company was pleased with its positive underlying growth in sales in its automotive business and the solid industry fundamentals supporting its growth initiatives.
He added that the nonautomotive businesses of the company and in particular the electrical distribution and industrial segments had been dragged down by tough macroeconomic conditions.
Profit overall for the company during fourth quarter was $161.3 million, down from its $165.6 million for the same time one year ago.
On a basis of per share, profit remained flat at just $1.07.
Revenue reached $3.68 billion equal to 3.7%.
Analysts projected that earnings would be $1.01 per share with revenue coming in at $3.75 billion.
On Tuesday, the business also increased its dividend for the quarter by 6.9%.