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Superior Industries (SUP) Earnings Miss in Q1, Fall Y/Y
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Superior Industries International, Inc.’s (SUP - Free Report) adjusted earnings were 31 cents per share in first-quarter 2017, missing the Zacks Consensus Estimate of 37 cents. Including one-time acquisition related costs, earnings came in at 12 cents per share, down from the 56 cents recorded in first-quarter 2016.
Revenues were $174.2 million in the reported quarter, lower than $186.1 million reported in the year-ago quarter. Revenues also missed the Zacks Consensus Estimate of $176.4 million. Wheel unit shipments fell 10.6% from 3.2 million units in the prior-year quarter to 2.8 million. Value-added sales, i.e., net sales less pass-through charges for aluminum decreased 6.7% to $95.5 million, weakened by lower unit volume.
Gross profit fell to $19.2 million (11% of net sales) from $27.7 million (14.9%) in the prior-year quarter. Gross margin, as of value-added sales, declined from 27.1% a year ago to 20.1%, owing to lower unit shipments and higher manufacturing expenses, partially offset by improved product mix.
Selling, general and administrative expenses increased to $15.3 million in first-quarter 2017 from $9 million in the prior-year quarter. Operating income was $3.9 million (2.3% of sales) compared with $18.7 million (10.1% of sales) a year ago. Operating margin, as a percentage of value-added sales, fell to 4.1% from 18.3% in the year-ago quarter due to acquisition expenses and lower gross margin.
Superior Industries’ shares declined 13.7% to $21.35 on Apr 26 on weak quarterly results.
Capital Deployment
In first-quarter 2017, Superior Industries repurchased 215,841 shares for $5 million. The company also paid a quarterly dividend of 18 cents per share.
The company expects to pay dividend of roughly $18 million in 2017.
Superior Industries International, Inc. Price, Consensus and EPS Surprise
In first-quarter 2017, Superior Industries’ cash outflow from operations was $1.6 million as against inflow of $16 million in the year-ago period. The decrease resulted from a lower net income and greater use of cash from working capital.
Outlook
The projections provided by the company do not include any future impact from the acquisition of UNIWHEELS. Superior Industries continues to expect net sales for 2017 in the range of $730–$750 million. Unit shipments in 2017 are expected in the range of 12−12.25 million.
Superior Industries expects value-added sales in the band of $400–$410 million and EBITDA in the range of $97−$105 million.
The company continues to project capital expenditures of around $50 million for 2017. The effective tax rate is still estimated in the range of 25−28%.
Price Performance
Superior Industries has underperformed the Zacks categorized Auto/Truck-Original Equipment industry in the last three months. During this period, the company’s share price has decreased 10.4%, while the industry added 2.8%. Share price primarily fell due to weak results for first-quarter 2017.
Zacks Rank & Key Picks
Superior Industries currently carries a Zacks Rank #4 (Sell).
Oshkosh has an expected long-term growth rate of 10.6%.
Fox Factory has an expected long-term growth rate of around 16.1%.
The expected long-term growth rate for Lear is pegged at 8.9%.
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Superior Industries (SUP) Earnings Miss in Q1, Fall Y/Y
Superior Industries International, Inc.’s (SUP - Free Report) adjusted earnings were 31 cents per share in first-quarter 2017, missing the Zacks Consensus Estimate of 37 cents. Including one-time acquisition related costs, earnings came in at 12 cents per share, down from the 56 cents recorded in first-quarter 2016.
Revenues were $174.2 million in the reported quarter, lower than $186.1 million reported in the year-ago quarter. Revenues also missed the Zacks Consensus Estimate of $176.4 million. Wheel unit shipments fell 10.6% from 3.2 million units in the prior-year quarter to 2.8 million. Value-added sales, i.e., net sales less pass-through charges for aluminum decreased 6.7% to $95.5 million, weakened by lower unit volume.
Gross profit fell to $19.2 million (11% of net sales) from $27.7 million (14.9%) in the prior-year quarter. Gross margin, as of value-added sales, declined from 27.1% a year ago to 20.1%, owing to lower unit shipments and higher manufacturing expenses, partially offset by improved product mix.
Selling, general and administrative expenses increased to $15.3 million in first-quarter 2017 from $9 million in the prior-year quarter. Operating income was $3.9 million (2.3% of sales) compared with $18.7 million (10.1% of sales) a year ago. Operating margin, as a percentage of value-added sales, fell to 4.1% from 18.3% in the year-ago quarter due to acquisition expenses and lower gross margin.
Superior Industries’ shares declined 13.7% to $21.35 on Apr 26 on weak quarterly results.
Capital Deployment
In first-quarter 2017, Superior Industries repurchased 215,841 shares for $5 million. The company also paid a quarterly dividend of 18 cents per share.
The company expects to pay dividend of roughly $18 million in 2017.
Superior Industries International, Inc. Price, Consensus and EPS Surprise
Superior Industries International, Inc. Price, Consensus and EPS Surprise | Superior Industries International, Inc. Quote
Financial Details
In first-quarter 2017, Superior Industries’ cash outflow from operations was $1.6 million as against inflow of $16 million in the year-ago period. The decrease resulted from a lower net income and greater use of cash from working capital.
Outlook
The projections provided by the company do not include any future impact from the acquisition of UNIWHEELS. Superior Industries continues to expect net sales for 2017 in the range of $730–$750 million. Unit shipments in 2017 are expected in the range of 12−12.25 million.
Superior Industries expects value-added sales in the band of $400–$410 million and EBITDA in the range of $97−$105 million.
The company continues to project capital expenditures of around $50 million for 2017. The effective tax rate is still estimated in the range of 25−28%.
Price Performance
Superior Industries has underperformed the Zacks categorized Auto/Truck-Original Equipment industry in the last three months. During this period, the company’s share price has decreased 10.4%, while the industry added 2.8%. Share price primarily fell due to weak results for first-quarter 2017.
Zacks Rank & Key Picks
Superior Industries currently carries a Zacks Rank #4 (Sell).
Better-ranked companies in the auto space include Oshkosh Corporation (OSK - Free Report) , Fox Factory Holding Corp (FOXF - Free Report) and Lear Corporation (LEA - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Oshkosh has an expected long-term growth rate of 10.6%.
Fox Factory has an expected long-term growth rate of around 16.1%.
The expected long-term growth rate for Lear is pegged at 8.9%.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buys"" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 ""Strong Sells."" Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>