Al Root

Automotive parts distributor Genuine Parts delivered a lot of news on Tuesday, including a corporate breakup. Investors aren't sure what to make of it yet.

For starters, there were earnings. For the fourth quarter, Genuine reported adjusted earnings per share of $1.55 from sales of $6 billion. Wall Street was looking for $1.82 and $6.1 billion, respectively.

It was a miss, and the adjusted figure excluded $825 million in charges, mainly due to pension plan changes.

For 2026, Genuine sees sales growing between 3% and 5.5%, better than the 2.5% Wall Street expects. Earnings per share, however, are expected to land between $7.50 and $8, lower than analysts projections of $8.37.

Shares were down 9.6% in early trading at $133.02, while the S&P 500 and Dow Jones Industrial Average were down 0.6% and 0.2%, respectively.

Shares weren't helped by a plan to split into two. Genuine Parts is going to separate its automotive parts distribution and industrial parts distribution businesses.

"Over the past decade, we established leading global footprints in attractive geographies, simplified our business mix, and accelerated strategic investments to advance and differentiate our business," said CEO Will Stengel in a news release. "Creating two focused, independent companies sharpens customer and market alignment, increases clarity and speed, simplifies operations, and enables disciplined, business-specific investments to unlock long-term value."

The value angle is easy to see. Genuine Parts stock typically trades for about 16 times earnings expected over the coming 12 months. Industrial Distributors Fastenal and W.W. Grainger typically trade for closer to 30 times and 25 times, respectively.

Genuine's auto parts distribution business generated 2025 sales of about $15.4 billion and earnings before interest, taxes, depreciation, and amortization, or Ebitda, of about $1.2 billion. Genuine's industrial distribution business generated 2025 sales of about $8.9 billion and Ebitda of $1.1 billion.

The auto parts business is one of the largest global distributors of aftermarket auto parts. The industrial distribution business maintains and repairs parts for many industries, including machinery, steel, chemicals, mining, and others.

Splitting up could unlock value, but that depends on how investors view auto parts distribution. Investors are also more focused on earnings and earnings guidance on Tuesday.

The transaction is expected to be finished in the first quarter of 2027.

Coming into Tuesday trading, Genuine Parts stock was up about 18% over the past 12 months.

Write to Al Root at allen.root@dowjones.com

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February 17, 2026 10:52 ET (15:52 GMT)

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