Gentex Corporation (GNTX - Free Report) reported fourth-quarter earnings of 58 cents per share, surpassing the Zacks Consensus Estimate of 50 cents. Markedly, higher-than-expected revenues from the Automotive Products segment resulted in this outperformance. Revenues from the segment came in at $521.6 million, beating the Zacks Consensus Estimate of $470 million. Also, higher-than-expected auto-dimming mirror unit shipments contributed to the impressive results.
The bottom line also marked a 48.7% rise from the year-ago profit of 39 cents per share, thanks to improved sales, strong product mix and higher auto-dimming mirror unit shipments. This Zeeland-based automotive products supplier reported net sales of $529.9 million, outpacing the Zacks Consensus Estimate of $481 million. The top-line figure also increased 19% year over year.
The company recorded gross margin of 40.9% for the reported quarter, higher than the year-ago quarter’s 36.5% on higher sales and cost-containment efforts implemented in the wake of COVID-19 pandemic. Importantly, it witnessed the highest gross margin in the December quarter since second-quarter 2004.
Segmental Performance
The Automotive segment’s net sales — which have the highest contribution to Gentex’s revenues — totaled $521.6 million for the fourth quarter, up 20% year over year, primarily on the back of higher auto dimming mirror shipments. For the quarter under review, auto-dimming mirror shipments in the North America market climbed 14% from the prior-year level to 3,756,000 units. Shipments also rose 14% year over year in the International market to 8,220,000 units. Total shipments rose 14% year over year to 11,976,000 units, surpassing the consensus mark of 11,108,000.
Other net sales, which include dimmable aircraft windows and fire protection products, dropped 17% from the year-ago quarter to $8.3 million. Dimmable aircraft window sales plummeted 34% year over year during the October-December period. Gentex expects dimmable aircraft window sales to continue being impacted until the recovery of the aerospace industry begins and Boeing 787 aircraft production levels get a boost.
Financial Tidbits
Total operating expenses increased 7% year over year to $54.3 million for fourth-quarter 2020 amid higher SG&A and R&D expenses. SG&A expenses flared up to $24.7 million from the year-ago quarter’s $22.1 million. Engineering and R&D expenses scaled up to $29.5 million from $28.8 million recorded in the year-ago period.
Gentex paid dividends of 12 cents per share during the quarter under review. During the December-end quarter, it repurchased 2.5 million shares of its common stock at an average price of $31.82 per share. As of Dec 31, 2020, the company had 9.4 million shares available for repurchase. During full-year 2020, Gentex returned $405.7 million to shareholders via dividends ($117.2) and stock buybacks ($288.5 million).
During fourth-quarter 2020, Gentex — which shares space with firms including Adient (ADNT - Free Report) , Magna International (MGA - Free Report) and American Axle & Manufacturing (AXL - Free Report) — repaid $25 million of debt under the company's revolving credit facility. The Zacks Rank #3 (Hold) company currently does not have any short/long-term debt. As of Dec 31, 2020, it had cash and cash equivalents of $423.4 million. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Projections
Based on the mid-January 2020 IHS Markit forecast, light vehicle production in Gentex’s primary markets is expected to soar 12% year over year in the current year. Amid the encouraging backdrop, it expects higher year-over-year revenues in 2021. The company envisions net sales in the band of $1.94-2.02 billion, indicating an increase from 2020 revenues of $1.68 billion. Gross margin is anticipated in the range of 39-40%. Capital expenditure and operating expenses are estimated within $85-$95 million and $210-$220 million, respectively. For calendar year 2022, the Zacks Rank #3 (Hold) firm expects sales growth of 4-8% year over year.
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Gentex Corporation (GNTX - Free Report) reported fourth-quarter earnings of 58 cents per share, surpassing the Zacks Consensus Estimate of 50 cents. Markedly, higher-than-expected revenues from the Automotive Products segment resulted in this outperformance. Revenues from the segment came in at $521.6 million, beating the Zacks Consensus Estimate of $470 million. Also, higher-than-expected auto-dimming mirror unit shipments contributed to the impressive results.
The bottom line also marked a 48.7% rise from the year-ago profit of 39 cents per share, thanks to improved sales, strong product mix and higher auto-dimming mirror unit shipments. This Zeeland-based automotive products supplier reported net sales of $529.9 million, outpacing the Zacks Consensus Estimate of $481 million. The top-line figure also increased 19% year over year.
The company recorded gross margin of 40.9% for the reported quarter, higher than the year-ago quarter’s 36.5% on higher sales and cost-containment efforts implemented in the wake of COVID-19 pandemic. Importantly, it witnessed the highest gross margin in the December quarter since second-quarter 2004.
Segmental Performance
The Automotive segment’s net sales — which have the highest contribution to Gentex’s revenues — totaled $521.6 million for the fourth quarter, up 20% year over year, primarily on the back of higher auto dimming mirror shipments. For the quarter under review, auto-dimming mirror shipments in the North America market climbed 14% from the prior-year level to 3,756,000 units. Shipments also rose 14% year over year in the International market to 8,220,000 units. Total shipments rose 14% year over year to 11,976,000 units, surpassing the consensus mark of 11,108,000.
Other net sales, which include dimmable aircraft windows and fire protection products, dropped 17% from the year-ago quarter to $8.3 million. Dimmable aircraft window sales plummeted 34% year over year during the October-December period. Gentex expects dimmable aircraft window sales to continue being impacted until the recovery of the aerospace industry begins and Boeing 787 aircraft production levels get a boost.
Financial Tidbits
Total operating expenses increased 7% year over year to $54.3 million for fourth-quarter 2020 amid higher SG&A and R&D expenses. SG&A expenses flared up to $24.7 million from the year-ago quarter’s $22.1 million. Engineering and R&D expenses scaled up to $29.5 million from $28.8 million recorded in the year-ago period.
Gentex paid dividends of 12 cents per share during the quarter under review. During the December-end quarter, it repurchased 2.5 million shares of its common stock at an average price of $31.82 per share. As of Dec 31, 2020, the company had 9.4 million shares available for repurchase. During full-year 2020, Gentex returned $405.7 million to shareholders via dividends ($117.2) and stock buybacks ($288.5 million).
During fourth-quarter 2020, Gentex — which shares space with firms including Adient (ADNT - Free Report) , Magna International (MGA - Free Report) and American Axle & Manufacturing (AXL - Free Report) — repaid $25 million of debt under the company's revolving credit facility. The Zacks Rank #3 (Hold) company currently does not have any short/long-term debt. As of Dec 31, 2020, it had cash and cash equivalents of $423.4 million. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Projections
Based on the mid-January 2020 IHS Markit forecast, light vehicle production in Gentex’s primary markets is expected to soar 12% year over year in the current year. Amid the encouraging backdrop, it expects higher year-over-year revenues in 2021. The company envisions net sales in the band of $1.94-2.02 billion, indicating an increase from 2020 revenues of $1.68 billion. Gross margin is anticipated in the range of 39-40%. Capital expenditure and operating expenses are estimated within $85-$95 million and $210-$220 million, respectively. For calendar year 2022, the Zacks Rank #3 (Hold) firm expects sales growth of 4-8% year over year.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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