NAPA Parent Suffers Earnings Drop, Despite 2017 Sales Boost
Feb. 27, 2018—Genuine Parts Co., parent of NAPA Auto Parts, suffered a 10-percent drop in net income to $616.8 million despite a 6.3-percent increase in sales to $16.3 billion for 2017, compared with 2016, Tire Business reports.
Its automotive segment, which includes NAPA, increased its operating income by 0.7 percent to $720.5 million as net sales edged up 6.7 percent to $8.66 billion for the year.
Alliance Automotive Group (AAG), the company's European acquisition that closed on Nov. 2, contributed 1.7 percent to sales. Before the impact of AAG, as well as transaction-related costs recorded in the third and fourth quarters of 2017 and the tax expense resulting from the federal Tax Cuts and Jobs Act recorded in the fourth quarter of 2017, adjusted net income was $686 million.
"Reflecting on 2017, GPC's 90th year, we surpassed $16 billion in revenues, a new record for us," said Paul Donahue, GPC president and CEO.
"In addition, we better positioned the company for sustained long-term growth, with significant investments in our existing businesses, as well as new ones, both in North America and abroad. Our balance sheet is in excellent condition, our cash flows are strong and our plans are in place for the year ahead."
Corporate sales for the fourth quarter, ended December 31, jumped 11.3 percent to $4.2 billion, compared with the year-ago period, however net income plummeted 29 percent to $108.2 million.