Rewrites paragraphs 1-8 for background, updates share reaction

By Apratim Sarkar and Sabrina Valle

Feb 17 (Reuters) - Genuine Parts GPC.N said on Tuesday it will split into two companies on the view that its auto and industrial units can be worth more apart, but the news was overshadowed by disappointing results and a weaker outlook.

Shares of the Atlanta-based automotive and industrial parts distributor slid more than 14%, after forecasting annual profit below Wall Street estimates.

The company, founded in 1928, runs the world’s largest auto‑parts and repair network through NAPA, while its Motion unit provides parts that keep industrial equipment operating.

Genuine Parts lost roughly $3 billion in market value on Tuesday, falling to about $17.5 billion. In 2025, the auto segment brought in more than $15 billion in revenue, and the industrial side added about $9 billion.

Elliott Investment Management, one of the world’s most active activist investors, said last year that Genuine Parts’ share price understated the value of its automotive and industrial businesses and that the company had a clear path to creating long‑term value.

Elliott eventually reached a settlement to add two new directors to Genuine Parts' board. Elliott did not immediately respond to a Reuters request for comment.

Corporate breakups have accelerated across industries as companies, some under pressure from activist investors, look to boost valuations by separating faster‑growing units from slower ones.

Warner Bros Discovery WBD.O, for example, has announced it would split into two publicly traded companies to give its studio and streaming operations more strategic focus and unlock shareholder value. Honeywell HON.O has also pursued a similar path, unveiling plans to break into three standalone companies following pressure from Elliott.

Genuine Parts' split, which does not require shareholder approval, is expected to be completed in the first quarter of 2027. Company names, executive teams and the boards for the separated companies would be announced at a later date.

INFLATION AND FIRST BRANDS DRAG

The automotive industry has been challenged by rising costs, tariffs and a bumpy electric vehicle market, prompting many automakers to rethink their plans.

Genuine Parts expects annual adjusted profit per share between $7.50 and $8.00, compared with analysts' expectations of $8.44, according to data compiled by LSEG.

On an adjusted basis, Genuine Parts earned a quarterly profit per share of $1.55, compared with the consensus estimate of $1.82.

The industry, however, is still reeling from First Brands' Chapter 11 bankruptcy protection last year. The company supplied filters, brakes and lighting systems.

Genuine Parts said it shifted to alternative suppliers to navigate the hit and added that it did not expect operational or product disruptions in 2026. It booked roughly $150 million in expected losses related to the incident.

(Reporting by Sabrina Valle in New York; Apratim Sarkar in Bengaluru; Editing by Shailesh Kuber, Alan Barona and Sonali Paul)

((Sabrina.valle@tr.com))