Genuine Parts lifts profit forecast as US prospects brighten

(Reuters) - Automotive parts distributor Genuine Parts raised its 2024 profit forecast on Thursday, hinging on strong demand for parts and improving automotive sales in the United States.

Higher prices and short supply of newer models have continued to drive demand for used vehicles and replacement parts as consumers try to make their existing vehicles last longer.

In the past months, the company has been implementing pricing initiatives and strategic sourcing programs to perk up slowing sales in its U.S. automotive segment that was hurt by high costs and other inflationary pressures.

"In Automotive, the actions taken in our U.S. Automotive business are gaining traction, and we are encouraged by the sequential improvement in performance," said President and Chief Operating Officer Will Stengel.

The Atlanta-based company expects to report adjusted earnings of between $9.80 and $9.95 per share for 2024, up from a prior guidance of $9.70 to $9.90 per share.

It reaffirmed its sales growth forecast of 3% to 5% for the full year.

Genuine Parts reported an adjusted profit of $2.22 per share for the quarter ended March 31, beating analysts' estimate of $2.16 per share.

However, total sales of $5.78 billion fell below estimates of $5.84 billion due to a decline at its Industrial business.

Revenue from the Automotive Parts segment, which made up 62% of the company's sales in 2023, was $3.57 billion in the first quarter of 2024.

(Reporting by Raechel Thankam Job in Bengaluru; Editing by Milla Nissi)