Genuine Parts sees supply chain, cost pressure from Middle East conflict

By Apratim Sarkar

April 21(Reuters) - Auto parts distributor Genuine Parts (GPC) said on Tuesday that it expects near-term cost pressures from the ongoing Middle East conflict, but reiterated its annual adjusted profit forecast after reporting lower first-quarter profit.

"The war is impacting the flow of certain goods across the global supply chain, adding inflationary pressure to certain product and logistics costs, and adding incremental uncertainty for customers," Genuine Parts (GPC) CEO Will Stengel said on a post- earnings call.

The company, however, still expects to see steady, maintenance-driven demand from its industrial segment.

Rising labor costs, sustained freight and logistics pressures, and higher prices for raw materials and energy have increased expenses across several industries, squeezing margins.

Genuine Parts (GPC) reported lower first-quarter profit. Net income fell to $189 million, or $1.37 per share, from $194 million, or $1.40 per share, a year earlier.

Quarterly revenue rose 6.8% to $6.26 billion, beating analysts' average estimate of $6.17 billion, according to data compiled by LSEG.

The company reiterated its annual adjusted profit forecast of $7.50 to $8 per share.

Shares of the Atlanta, Georgia-based company rose over 3% in morning trade.

The war with Iran has also curbed discretionary spending among cash-strapped consumers, with higher gasoline prices prompting some buyers to consider electric or more fuel-efficient vehicles.

In February, Genuine Parts (GPC) said it would split into two companies, separating its automotive and industrial businesses, following months of pressure from activist investor Elliott Investment Management to improve operations and margins.

(Reporting by Apratim Sarkar; Editing by Shreya Biswas and Tasim Zahid)