Motion’s 2Q Declines Reflect Ongoing Industrial Softness

Genuine Parts Company reported its 2024 second quarter financial results on July 23, which showed a slight increase in overall sales that were supported by recent acquisitions and operational performances throughout its divisions. Meanwhile, sales continued to slide at Motion — GPC’s Industrial Parts subsidiary — though not as much as in 1Q24.

Industrial Parts

At Birmingham, AL-based Motion, 2Q total sales were $2.2 billion, down 1.1% year-over-year. The decline was attributed to a 1.6% decrease in comparable sales, despite a 0.7% benefit from acquisitions. The 2Q sales figure was a slight uptick sequentially following 1Q24’s 2.2% decline.

Meanwhile, Motion’s 2Q segment profit decreased by 2.3% year-over-year to $277 million, with a profit margin of 12.4% that was down 60 basis points.

On MDM’s 2024 Top Distributors Lists, Motion ranked No. 2 for Industrial Supplies, No. 2 for MRO, No. 1 for Power transmission/bearings, No. 3 for fluid power and No. 2 for Hose/Hose Accessories.

Automotive

GPC’s Automotive segment — which does business as NAPA Auto Parts — reported global sales of $3.7 billion for Q2 2024, a 2.0% increase from the previous year. This growth was driven by a 1.3% benefit from acquisition, although comparable sales decreased by 0.6%. Segment profit fell by 4.7% to $314 million, with a profit margin of 8.4%.

Overall

GPC reported overall sales of $6.0 billion for the second quarter of 2024, a slight increase of 0.8% from the previous year. Net income for the quarter was $296 million, down from $344 million a year earlier. Adjusted net income was $342 million, nearly matching the prior year’s performance.

“Our quarterly results reflect softer than expected market conditions, which are tempering demand particularly in our Industrial and U.S. and European Automative businesses. Despite a challenging macro-environment, our teams are operating well and remain focused on executing our long-term strategic initiatives,” GPC President and CEO Will Stengel said in a July 23 news release.

2024 Outlook

GPC revised its full-year 2024 guidance. The company now expects total sales growth of between 1% and 3%, down from the previous forecast of 3% to 5% issued after 1Q24. Automotive sales growth is expected to range from 1% to 3%, and Industrial sales growth is projected at 0% to 2%. The company maintains its forecast for net cash provided by operating activities at $1.3 billion and free cash flow at $800 million to $1.0 billion.