(Reuters) -Genuine Parts Co on Tuesday cut its full-year profit forecast on higher restructuring costs and weak demand for auto parts.
The company also missed its third-quarter profit estimate.
High interest rates, rising costs and tariffs, along with persistent inflation, have led U.S. consumers to delay non-essential vehicle repairs, leading to softer demand and straining margins in the automotive segment.
The company is conducting a strategic review to boost profitability and unlock shareholder value, following a settlement with activist investor Elliott Investment Management, which has taken a more than $1 billion stake and secured two board seats.
Genuine Parts incurred $49 million in after-tax expenses or 36 cents per share, tied to restructuring efforts aimed at streamlining operations.
Automotive sales rose 5% on year, primarily due to acquisitions and currency effects, while organic demand stayed weak.
The company now expects full-year adjusted earnings of $7.50 to $7.75 per share, compared with previous forecast of $7.50 to $8.00 per share.
However, lifts its forecast on annual sales growth to 3%-4% from previous expectation of 1%-3%.
Genuine Parts posted adjusted net income of $22.62 million, or $1.98 per share, for the third quarter, missing analysts’ average estimate of $1.99 per share, according to data compiled by LSEG.
Its revenue reached $6.30 billion, above expectations of $6.12 billion.
(Reporting by Apratim Sarkar; Editing by Vijay Kishore)
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