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Letter to the Editor
Monday July 19
Genuine Parts Company Reports 7% Sales Increase in Q2
Genuine Parts Company reported sales and earnings for the second quarter and six months ended June 30, 2004. Larry Prince, Chairman of the Board of Directors, announced that sales totaling $2.3 billion were up 7 percent compared to the second quarter of 2003. Net income was $101.1 million, an increase of 12 percent, compared to $90.1 million for the second quarter of 2003. On a per share diluted basis, net income was 58 cents, up 12 percent compared to 52 cents for the second quarter last year.For the six months ended June 30, 2004, sales totaled $4.5 billion, up 8 percent compared to the same period in 2003. Net income for the six months was $201.3 million, an increase of 13 percent over $178.6 million recorded in the previous year before the cumulative effect of an accounting change adopted January 1, 2003. Earnings per share on a diluted basis were $1.15, up 13 percent compared to $1.02 for the same period last year before the accounting change. In accordance with the Financial Accounting Standards Board's EITF 02-16 affecting the accounting treatment of cash consideration received from vendors, a non-cash charge of $20 million was recorded as of January 1, 2003, representing the cumulative effect of a change in accounting principle. After the cumulative effect adjustment in 2003, net income for the six months ended June 30, 2004 was up 27 percent and diluted earnings per share were up 26% compared to the six months ended June 30, 2003.
Prince stated, "Our second quarter results continued the positive direction established in the first quarter with both sales and earnings reaching record levels. We were again pleased to see each of our four business segments contribute to our success in the quarter."
Prince commented, "Sales for Motion Industries, our Industrial Group, and EIS, our Electrical/Electronics Group, were especially strong. Both of these companies serve the manufacturing sector, which is currently experiencing a strong recovery from earlier periods. Motion's sales grew by 11 percent for the quarter and EIS was up 17 percent. Automotive sales were up 4 percent for the period and S.P. Richards, our Office Products Group, improved by 5 percent. It is interesting to note over a period of time how the diversity of our various businesses brings us strength and balance. The splendid performance we are now seeing at Motion and EIS is a clear statement to this idea."
He concluded, "We have a number of positives working for us as we move into the second half of 2004. The diversity of our company in four sound industries gives us great balance and we expect to see continued improvement. Our Balance Sheet remains in excellent shape to support the continued growth ahead of us and we believe the final half of 2004 will be a good one for Genuine Parts Company."
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