Genuine Parts Company reported its 2019 fourth quarter and full-year financial results on Wednesday, showing that total sales at its industrial segment — Motion Industries — had a sizeable year-over-year decline, while the decrease in comparable sales was more modest when excluding divestments and acquisitions.
Q4 sales at Birmingham, AL-based MRO products distributor and services provider Motion Industries — No. 4 on Industrial Distribution's 2019 Big 50 List — totaled $1.48 billion, down 5.6 percent year-over-year (YoY). Sales declined 12.3 percent due to Motion's Sept. 30 divestment of electrical distributor EIS Inc., partially offset by a 7.6 percent increase from acquisitions. Excluding those factors, Motion's Q4 comparable sales decreased 1.2 percent, compared to Q3's comparable sales gain of 0.9 percent. Motion's Q4 operating profit of $127 million was down from $131 million a year earlier and $137.5 million in Q3.
The sales declines correlate with those of other large industrial distributors that have weathered a considerable downturn in demand for industrial products throughout 2019 and into 2020.
During Q4, Motion closed on its acquisition of Fluid Power House, a full-service fluid power distributor with four locations in Ontario, Canada.
For the full-year, Motion Industries had total 2019 sales of $6.53 billion, up 3.6 percent from 2018, with comparable sales up 1.7 percent, while operating profit of $522 million rose 7.1 percent.
Genuine Parts Co. had overall Q4 sales of $4.71 billion, up 2.2 percent YoY. That gain included 0.5 percent comparable growth and approximately 6.7 percent growth from acquisitions, offset by a 4.2 percent decline from the sale of EIS. The company's Q4 total profit of $8.9 million was minuscule compared to the $187 profit it had a year earlier, while adjusted net profit of $197 million was a YoY increase.
Paul Donahue, Chairman and Chief Executive Officer, commented, ''The quarter was highlighted by the continued improvement in gross margin, solid sales and operating results in our US and Australasian automotive businesses and continued operating margin expansion in Industrial," said Paul Donahue, GPC chairman and CEO. "Our team was busy executing on our growth strategy while also focused on the cost savings initiatives announced last quarter. We are in the midst of streamlining functional areas across the organization, reducing the total number of distribution facilities and implementing greater use of automation within our facilities and back-office functions."
For the full year, GPC's total 2019 sales of $19.4 billion increased 3.5 percent over 2018. Total profit of $621 million was down from 2018's $810 million, while adjusted net profit was $833 million.
GPC said it is forecasting 2020 total sales growth of 3 to 4 percent, including 2 to 3 percent growth at Motion Industries. It expects 4 to 5 percent growth in its Automotive segment, while expecting a 1 to 2 percent decline in its Business Products segment.