Motion Industries Q1 Sales Improve to Flat; Profit Margin Grows

Genuine Parts Company also raised its previous sales growth outlook for both Industrial and Automotive.


Genuine Parts Company reported its 2021 first quarter fiscal results on Thursday, showing  continued recovery at its industrial parts subsidiary, Motion (formerly Motion Industries).

Having made a slew of corporate executive appointments since the start of the year, Motion saw sales of $1.51 billion — 34 percent of GPC's total — improve to essentially breakeven year-over-year, down just 0.1 percent. That compares with Q4 sales that were down 3.3 percent. Q1 sales had a 1.3 percentage point benefit for foreign currency and a 0.6-point benefit from acquisitions — both largely negated by a 1.8-point decline in comparable sales (-4 percent in Q4). Sequentially, Motion's Q1 overall sales increased 5.6 percent from Q4 2020.

Motion's Q1 total profit of $125 million jumped 10 percent year-over-year, while profit margin of 8.3 percent gained 80 basis points.

In its Q1 investor presentation, GPC noted a strong growth outlook for plant automation and robotics solutions and that the company is projecting positive comparable sales for Motion over the balance of 2021.

GPC also noted the following regarding Motion:

  • Improves sales trends among virtually all product categories and industries served
  • Continuing expansion of value-add business — Automation, Conveyance and Repairs
  • Customers operating at higher run rates and releasing capital project orders
  • Strategic initiatives that include: 
    • Consideration of strategic M&A to further boost products/services
    • Omni-channel buildout to accelerate e-commerce growth
    • Expansion of industrial services and solutions capabilities
    • Strategically enhanced pricing and product category management
    • Network optimization and automation to improve productivity

GPC's Automotive unit — which does business as NAPA Auto Parts — saw considerably more impressive growth. Automotive sales of $3.0 billion (66 percent of GPC's total) jumped 14.3 percent year-over-year and improved 6.4 percent sequentially from Q4 2020. Comparable sales were up 8.3 percent in Q1. Automotive profit of $236 million soared 65.3 percent year-over-year, while profit margin of 8.0 percent was up 250 basis points.

Overall, GPC's total Q1 sales of $4.46 billion improved approximately 9.1 percent year-over-year, with comparable sales up 4.6 percent. Operating profit of $218 million nearly doubled the $122 million from a year earlier, while Q1 net profit — also $218 million, likewise surged 79 percent.

Looking forward, GPC raised its forecasted full-year 2021 sales growth outlook for both Industrial and Automotive. The company raised its previous outlook of 3 to 5 percent Industrial Growth to 4 to 6 percent, and raised its previous outlook of 4 to 6 percent Automotive growth to 5 to 7 percent.

"We have a strong cash position and ample financial strength to pursue strategic growth opportunities through our disciplined capital allocation strategy," said Paul Donahue, GPC chairman and CEO. "Looking ahead, GPC is well-positioned to benefit from a strong economic recovery, favorable sales trends and clear strategic plan to capture profitable growth, generate strong cash flow and create shareholder value,."

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