Genuine Parts Company (0IUX.L) Q2 2025 Earnings Report

Genuine Parts Company reported QQ2 2025 revenue of USD 6.164B, delivering a modest top-line expansion of 3.39% year-over-year and 5.09% quarter-over-quarter. Gross profit rose 6.6% YoY to USD 2.324B, delivering a robust gross margin of 37.7%, underscoring solid product mix and pricing discipline amid a still-challenging operating environment. However, net income declined 13.8% YoY to USD 254.9M and EPS held at USD 1.83, reflecting a substantial net negative impact from non-operating items and a higher effective tax rate relative to prior periods. The operating margin remained resilient at 6.85% (USD 422.6M operating income) despite higher operating expenses, with QoQ operating income up 23.3%, signaling some seasonality and expense management benefit from Q2 sequential dynamics.

The balance sheet shows a strong asset base and sizable international exposure, but notable leverage: total debt USD 6.42B and net debt USD 5.96B, with net debt to EBITDA around the high teens to low double digits given an EBITDA of USD ~0.502B. Cash flow remains positive, with USD 209.9M operating cash flow and USD 80.96M free cash flow for the quarter, supporting dividend payments (USD 142.95M) and capex (USD 128.98M). The company maintains a modest liquidity cushion (cash USD 458M) but faces leverage and coverage considerations (interest coverage ~9.19x).

Key takeaways for investors: (1) Revenue momentum and stable gross margins suggest durable demand for Genuine Parts’ automotive and industrial replacement parts, (2) earnings progression is pressured by non-operating items despite solid operating cash flow, (3) leverage remains a meaningful consideration for longer-term capital allocation and risk management, (4) ongoing free cash flow supports dividends and capex, with potential to deleverage over time if operating conditions persist.