Genuine Parts Company Q3 2009 Earnings Call Transcript

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2009-10-16 13:07:08.0

Tags: Call Transcript, Earnings, Pricing Strategy, Question, RBC Capital Markets, Adjustment, Sales Strategy, Pricing, Marketing Research, Sales, Marketing, Seeking Alpha, Genuine Parts Co.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Scott Ciccarelli from RBC Capital Markets.

Austin Paul - RBC Capital Markets

This is Austin Paul sitting in for Scott today. My first question relates to the segment breakout you provided, specifically the operating profit on the other line item. You mentioned the positive impact of the $4 million on the pension valuation but when I add that back, I still get a lower number, both sequentially and year over year. I was wondering if you could help me understand what else is in that other line item and if this represents a new run-rate going forward.

Jerry Nix

I don’t believe it represents a new run-rate, Austin. What’s in that line is our corporate expense and that includes a number of things, such as that pension but you are right -- we were down about $9 million to $10 million there and $4.5 million of that was due to the retirement plan adjustment. The other was due to a lack of stock option expense and also an adjustment to the bonuses that we accrued. We are obviously not going to be paying out the bonuses that we had planned on at the beginning of the year so it’s a combination primarily of those three items that makes up most of it.

Austin Paul - RBC Capital Markets

Great, thank you. And my second question relates to the pricing trends you’ve talked about previously, the NAPA segment. What are you seeing there both this quarter and going forward, and could you please talk a little bit about how that affected both the sales and operating profit at that segment?

Tom Gallagher

I’ll try to answer that question -- as far as what we are seeing currently, we think there is some stability in the marketplace currently but we also feel with our pricing checks and surveys that we’ve got a little more adjusting to do on some specific product categories and we’ll be making some of those adjustments in the fourth quarter.

As far as the impact thus far this year in automotive, it’s a negative 1.9% through September.

Austin Paul - RBC Capital Markets

Great. Thanks, guys.

Operator

Your next question comes from the line of Tony Cristello with BB&T Capital Markets.

Tony Cristello - BB&T Capital Markets

I guess one of the questions I wanted to talk -- I have a few but when you think about the trends in automotive, if I were to strip out fleet now, would it be close on your core automotive to being back up to a sort of flat to positive on a sales basis?

 

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