Motion sales declined 13.0 percent in 2020
Genuine Parts Company reported that sales for its Motion segment were $1.4 billion in the fourth quarter of 2020, a decline of 3.3 percent from 2019.
The total represented 34 percent of total company revenues.
The decline in sales was comprised of a 4.4 percent decrease in comparable sales, partially offset by a 0.6 percent contribution from acquisitions and a 0.5 percent net benefit of foreign currency. Segment profit of $133.4 million increased 5.1 percent, with profit margin of 9.3 percent, up 70 basis points from 2019.
For the full year, Motion's sales of $5.7 billion declined 13.0 percent from $6.5 billion the previous year.
Including its NAPA automotive segment, sales from continuing operations were $4.3 billion in the fourth quarter, a 0.7 percent decrease from the same period in 2019. The decrease in sales was primarily attributable to a 2.8 percent decline in comparable sales, partially offset by a 0.8 percent benefit from acquisitions and a 1.3 percent net benefit of foreign currency and other.
Net income from continuing operations was $171.6 million, or a diluted earnings per share of $1.18. This compares to $79.0 million, or 54 cents, in the prior year period.
"Automotive sales were led by strong growth in Australasia, while the pace of recovery slowed in Europe and North America relative to the previous quarter. In response, our team was focused on our strategic priorities to strengthen our supply chain, improve our inventory availability and enable our sales team to build positive sales momentum. Industrial sales were much improved from the prior quarter and grew progressively stronger through the last three months of the year. These top line results, combined with further gross margin improvement and lower operating expenses, drove expanded operating margins in both our automotive and industrial businesses and strong earnings growth. We also finished the year with a strong balance sheet, ample liquidity and robust cash flow," said Paul Donahue, chairman and chief executive officer of Genuine Parts Company.
Full-year sales of $16.5 billion declined 5.6 percent compared to $17.5 billion in 2019. Net income from continuing operations was $163.4 million and diluted earnings per share were $1.13 for the twelve months, compared to $646.5 million, or $4.42 per share in 2019.
In a conference call with analysts on Wednesday, Donahue said that Motion will continue to execute on strategic initiatives to drive profitable sales growth, improve operational productivity and deliver customer value. "These initiatives include building out our omnichannel capabilities to drive organic sales; optimize the value of the Motion website and accelerate e-commerce growth; growing our services and solutions business to expand our expertise in areas such as repair, conveyance and automation; ongoing disciplined M&A to further boost our products and service offering, while expanding our global footprint and market presence; enhancing our global pricing and product category management strategies to ensure sales excellence, margin effectiveness and a product offering that evolves the Motion brand globally; and optimizing our global distribution network, the enhanced automation and facility rationalization to lower cost, improve productivity and deliver excellent customer service."
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