Superior Industries International, Inc.’s (SUP - Free Report) earnings were 31 cents per share in fourth-quarter 2016, which surpassed the Zacks Consensus Estimate of 22 cents. Earnings were flat year over year.
Revenues were $188.3 million in the reported quarter, lower than $194.6 million reported in the year-ago quarter. Revenues however outpaced the Zacks Consensus Estimate of $177 million. Wheel unit shipments fell 3.6% to 3.1 million from 3.2 million units in the prior-year quarter. Value-added sales i.e. net sales less pass-through charges for aluminum increased 3.3% to $106.4 million, driven by favorable product mix and partially offset by lower unit volume and foreign currency fluctuations, mainly the Mexican Peso.
Gross profit fell to $18 million (9.5% of net sales) from $23.6 million (12.1%) in the prior-year quarter. Gross margin, as of value-added sales, declined to 16.9% from 22.9% a year ago owing to higher freight costs.
Selling, general and administrative expenses decreased to $6.9 million in fourth-quarter 2016 from $10.1 million in the prior-year quarter. Operating income was $11.1 million (5.9% of sales) compared with $13.5 million (7% of sales) a year ago. Operating margin, as a percentage of value-added sales, fell to 10.4% from 13.1% in the year-ago quarter.
2016 Performance
Superior Industries’ earnings were $1.62 per share for 2016, up 80% from the 2015 level of 90 cents. However, the figure missed the Zacks Consensus Estimate of $1.79.
Revenues for 2016 inched up 0.6% to $732.7 million from $727.9 million in 2015. Revenues also beat the consensus mark of $721 million.
Capital Deployment
In 2016, the company repurchased 1,040,688 shares for $20.7 million. Since the start of this year till Mar 1, the company bought back 194,358 shares for $4.5 million. It has $35 million remaining under its share repurchase authorization of $50 million.
In the reported quarter, the company paid a quarterly dividend of 18 cents per share.
The company expects to pay dividend of roughly $18 million in 2017.
Financial Details
In 2016, Superior Industries’ cash flow from operations was $78.5 million compared with $59.3 million in the year-ago period. The increase in cash flow resulted from better earnings and lower net working capital in 2016.
Outlook
Superior Industries expects net sales for 2017 in the range of $730–$750 million. Unit shipments in the first quarter of 2017 are expected to decline 200,000 to 300,000 year over year.
Superior Industries expects value-added sales in the band of $400–$410 million.
The company expects 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 estimated in the range of 25−28%.
Price Performance
Superior Industries has underperformed the Zacks categorized Auto/Truck-Original Equipment industry over the last three months. During this period, the company’s share price has increased 4.5%, while the industry added 11.9%. Share price benefitted from a solid capital deployment.
Zacks Rank & Key Picks
Superior Industries currently carries a Zacks Rank #4 (Sell).
Better-ranked companies in the auto space include Lear Corporation (LEA - Free Report) , American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) and General Motors Company (GM - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
For the current year, Lear Corporation, American Axle and General Motors expect earnings growth of around 8.9%, 8.1% and 9.4%, respectively.
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Superior Industries International, Inc.’s (SUP - Free Report) earnings were 31 cents per share in fourth-quarter 2016, which surpassed the Zacks Consensus Estimate of 22 cents. Earnings were flat year over year.
Revenues were $188.3 million in the reported quarter, lower than $194.6 million reported in the year-ago quarter. Revenues however outpaced the Zacks Consensus Estimate of $177 million. Wheel unit shipments fell 3.6% to 3.1 million from 3.2 million units in the prior-year quarter. Value-added sales i.e. net sales less pass-through charges for aluminum increased 3.3% to $106.4 million, driven by favorable product mix and partially offset by lower unit volume and foreign currency fluctuations, mainly the Mexican Peso.
Gross profit fell to $18 million (9.5% of net sales) from $23.6 million (12.1%) in the prior-year quarter. Gross margin, as of value-added sales, declined to 16.9% from 22.9% a year ago owing to higher freight costs.
Selling, general and administrative expenses decreased to $6.9 million in fourth-quarter 2016 from $10.1 million in the prior-year quarter. Operating income was $11.1 million (5.9% of sales) compared with $13.5 million (7% of sales) a year ago. Operating margin, as a percentage of value-added sales, fell to 10.4% from 13.1% in the year-ago quarter.
2016 Performance
Superior Industries’ earnings were $1.62 per share for 2016, up 80% from the 2015 level of 90 cents. However, the figure missed the Zacks Consensus Estimate of $1.79.
Revenues for 2016 inched up 0.6% to $732.7 million from $727.9 million in 2015. Revenues also beat the consensus mark of $721 million.
Capital Deployment
In 2016, the company repurchased 1,040,688 shares for $20.7 million. Since the start of this year till Mar 1, the company bought back 194,358 shares for $4.5 million. It has $35 million remaining under its share repurchase authorization of $50 million.
In the reported quarter, the company paid a quarterly dividend of 18 cents per share.
The company expects to pay dividend of roughly $18 million in 2017.
Financial Details
In 2016, Superior Industries’ cash flow from operations was $78.5 million compared with $59.3 million in the year-ago period. The increase in cash flow resulted from better earnings and lower net working capital in 2016.
Outlook
Superior Industries expects net sales for 2017 in the range of $730–$750 million. Unit shipments in the first quarter of 2017 are expected to decline 200,000 to 300,000 year over year.
Superior Industries expects value-added sales in the band of $400–$410 million.
The company expects 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 estimated in the range of 25−28%.
Price Performance
Superior Industries has underperformed the Zacks categorized Auto/Truck-Original Equipment industry over the last three months. During this period, the company’s share price has increased 4.5%, while the industry added 11.9%. Share price benefitted from a solid capital deployment.
Zacks Rank & Key Picks
Superior Industries currently carries a Zacks Rank #4 (Sell).
Better-ranked companies in the auto space include Lear Corporation (LEA - Free Report) , American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) and General Motors Company (GM - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
For the current year, Lear Corporation, American Axle and General Motors expect earnings growth of around 8.9%, 8.1% and 9.4%, respectively.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
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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